Bartlett Company's target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of common using reinvested earnings is 12.75%. The firm will not be issuing any new stock. You were hired as a consultant to help determine their cost of capital. What is its WACC?
A. 8.98%
B. 9.26%
C. 9.54%
D. 9.83%
E. 10.12%
Answer: B
You might also like to view...
If an offeree accepts the offer but complains about the terms of the offer, a rejection is implied.
Answer the following statement true (T) or false (F)
Which of the following accounts might be placed first in a journal entry?
a. Bonds Payable, when it has been decreased b. Cash, when it has been decreased c. Unearned Revenue, when it has been increased d. Interest Income, when it has been increased
An inclusive group in which members feel welcomed and accepted will tend ________.
A) to have subgroups B) not to have subgroups C) to outperform diverse groups D) to be high-performing
Visto is a much loved British drink, widely available in the UK but nowhere else. Lately sales have been falling and the big supermarkets have cut back on their orders. Which of the following is most likely to be a successful extension strategy for this well established drink?
a. increasing the price b. selling it online c. exporting it to other countries d. offering the supermarkets special deals as incentives to stock it e. advertising it on the Internet