The expected returns on the debt and equity of a levered firm are rE=15% and rD=7%, and the current market value of the debt and equity are E=66 and D=44, respectively. What is the firm's weighted average cost of capital (WACC)?
a. 7.8%
b. 9.8%
c. 11.8%
d. 13.8%
FORMULA: WACC=rD(D/V)+rLE(E/V)
C
Business
You might also like to view...
What is meant by the digital marketing?
What will be an ideal response?
Business
Why does the payroll process lend itself to batch processing?
Business
A limited partnership that was organized in Alabama and operating in Texas with no operations outside the U.S. is considered a ________ in Texas
A) foreign limited partnership B) limited liability corporation C) domestic limited partnership D) general partnership
Business
_________ management systems maintain customer contact information and identify prospective customers for future sales.
Fill in the blank(s) with the appropriate word(s).
Business