arlotte's Crochet Shoppe has 16,100 shares of common stock öl nds outstanding, with a par value of $2,000 per bond. The pretax cost of debt is 6.25 percent and the bonds sell for 99 percent e is 21 percent? Multiple Choice
arlotte's Crochet Shoppe has 16,100 shares of common stock öl nds outstanding, with a par value of $2,000 per bond. The pretax cost of debt is 6.25 percent and the bonds sell for 99 percent e is 21 percent? Multiple Choice
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
charlotte's crochet shoppe has 16,100 shares of common stock outstanding at a price per share of $81 and a rate of return of 11.85 percent. the company also has 340 bonds outstanding, with a par value of $2,000 per bond. the pretax cost of debt is 6.25 percent and the bonds sell for 99 percent of par. what is the firm's wacc if the tax rate is 21 percent?
Transcribed Image Text:Charlotte's Crochet Shoppe has 16,100 shares of common stock outstanding at a price per share of $81 and a rate of return of 11.85 percent. The company also has 340
bonds outstanding, with a par value of $2,000 per bond. The pretax cost of debt is 6.25 percent and the bonds sell for 99 percent of par. What is the firm's WACC if the tax
rate is 21 percent?
Multiple Choice
O
O
9.50%
8.88%
8.71%
9.94%
10.38%
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