Multiple Choice
A company's capital structure is made up of 40% debt and 60% common equity (both at market values) .The interest rate on bonds similar to those issued by the company is 8%.The cost of equity is estimated to be 15%.The income tax rate is 40%.The company's weighted cost of capital is
A) 11.5%.
B) 12.2%.
C) 10.9%.
D) 8) 9%.
Correct Answer:
Verified
Correct Answer:
Verified
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