What is the weighted average cost of capital after taxes if the desired capital structure is 40% debt and 60% equity, investors require a 10% pre-tax return from debt and 25% from equity, and the tax rate is 30%?
A) 18%
B) 20%
C) 11%
D) 15%
E) 19%
A
Learning Outcome: F-13: Estimate a firm's cost of capital
Business
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