Multiple Choice
Suppose that Model Nails, Inc.'s capital structure features 60 percent equity, 40 percent debt, and that its before-tax cost of debt is 6 percent, while its cost of equity is 10 percent. If the appropriate weighted average tax rate is 28 percent, what will be Model Nails' WACC?
A) 7.73%
B) 8.00%
C) 8.40%
D) 16.00%
Correct Answer:
Verified
Correct Answer:
Verified
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