Werner Corporation Has a Target Capital Structure That Consists of 40

Multiple Choice

Werner Corporation has a target capital structure that consists of 40 percent debt and 60 percent equity. Werner can borrow at an interest rate of 10 percent. Also, Werner has determined its cost of equity to be 14 percent. Werner's tax rate is 40 percent. What is Werner's weighted average cost of capital?​

A) 10.8 percent
B) 12.4 percent
C) 9.2 percent
D) none of the above