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Figs,Dates and Other Things (FDT)has the Following Cost of Capital

Question 54

Multiple Choice

Figs,Dates and Other Things (FDT) has the following cost of capital structure:  Weight  Cost  Debt 45%4.50% Preferred Shares 10%5.80% Equity 45%9.20%\begin{array} { | l | c | c | } \hline & \text { Weight } & \text { Cost } \\\hline \text { Debt } & 45 \% & 4.50 \% \\\hline \text { Preferred Shares } & 10 \% & 5.80 \% \\\hline \text { Equity } & 45 \% & 9.20 \% \\\hline\end{array} What is FDT's WACC?


A) 6.50%
B) 5.00%
C) 7.50%
D) 6.75%

Correct Answer:

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