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 percent
B) 8.00 percent
C) 8.40 percent
D) 16.00 percent
Correct Answer:
Verified
Correct Answer:
Verified
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