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The Weighted Average Cost of Capital for Patrick Corp

Question 25

Multiple Choice

The weighted average cost of capital for Patrick Corp.is currently 10%.Patrick Corp.is considering a new project but must raise new debt to finance the project.Debt represents 25% of the capital structure.If the after tax cost of debt will rise from 6% to 10%,what is the marginal cost of capital?


A) 10.25%
B) 10.75%
C) 11.00%
D) 11.50%

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