Multiple Choice
TransPacific Inc.is an import-export company specializing in products from Asia and the West Coast.It can borrow in the debt market at 9%.Its cost of equity with 40% D/V ratio is 13%.Its corporate tax rate is 20%.If the M&M world of taxes holds true,what is the WACC for TransPacific Inc.with a 40% D/V financing?
A) 7.80%
B) 8.00%
C) 9.44%
D) 10.68%
Correct Answer:
Verified
Correct Answer:
Verified
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