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A Firm Requires an Investment of $100,000,financed with $60,000 of Equity

Question 4

Multiple Choice

A firm requires an investment of $100,000,financed with $60,000 of equity and the remainder with debt.If the return on equity is 12%,the cost of debt is 4% and the tax rate is 35%,what is the firm's WACC?


A) 6.64%
B) 7.20%
C) 7.96%
D) 8.24%
E) 8.80%

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