Answered: Meiston Press has a debt-equity ratio… | bartleby

Entrepreneurial Finance

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter7: Types And Costs Of Financial Capital

Section: Chapter Questions

Problem 11EP

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Please provide answer this financial accounting question

Meiston Press has a debt-equity ratio of 1.10. The pre-tax cost
of debt is 8.65 percent and the cost of equity is 13.4 percent.
What is the firm's weighted average cost of capital (WACC)
if the tax rate is 34 percent?
a. 11.40 percent
b. 9.37 percent
c. 10.15 percent
d. 10.52 percent

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