Multiple Choice
Werner Corporation has a target capital structure that consists of 40% debt and 60% equity. Werner can borrow at an interest rate of 10%. Also, Werner has determined its cost of equity to be 14%. Werner's tax rate is 40%. What is Werner's weighted average cost of capital?
A) 10.80%
B) 12.40%
C) 9.20%
D) None of the above
Correct Answer:
Verified
Correct Answer:
Verified
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