Suppose That TipsNToes, Inc

Multiple Choice

Suppose that TipsNToes, Inc.'s capital structure features 40 percent equity, 60 percent debt, and that its before-tax cost of debt is 9 percent, while its cost of equity is 15 percent. If the appropriate weighted average tax rate is 34 percent, what will be TipsNToes' WACC?

A) 9.36 percent
B) 9.56 percent
C) 11.40 percent
D) 24.00 percent