Ghan Rail Corporation,whose Tax Rate Is 40%,has Two Sources of Funds

Multiple Choice

Ghan Rail Corporation,whose tax rate is 40%,has two sources of funds: long-term debt with a market
Value of $8 000 000 and an interest rate of 8%,and equity capital with a market value of $12 000 000 and a cost of equity of 12%.What is Ghan Rail's weighted-average cost of capital (WACC) ?

A) .0480
B) .1000
C) .0912
D) .0800