Find the Weighted Average Cost of Capital for a Firm

Multiple Choice

Find the weighted average cost of capital for a firm that has a debt-to-equity ratio of 1½,a tax rate of 34 percent,a levered cost of equity of 12 percent and an after-tax cost of debt of 8 percent.

A) 9.6 percent
B) 7.968 percent
C) 14 percent
D) none of the options