The Gnome Company Has Provided the Following Information What Was Gnome's Weighted Average Cost of Capital?
A) 8

Multiple Choice

The Gnome Company has provided the following information:
$$\begin{array} { | l | l | } \hline \text { Income tax rate } & 30 \% \\\hline \text { Target rate of return } & 12 \% \\\hline \text { Total assets } & \$ 300,000 \\\hline \text { Total liabilities } & \$ 150,000 \\\hline \text { Current liabilities } & \$ 50,000 \\\hline \text { Operating income } & \$ 40,000 \\\hline \text { Economic value added } & \$ 3,000 \\\hline\end{array}$$ What was Gnome's weighted average cost of capital?

A) 8%
B) 10%
C) 14%
D) 12%