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
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
Chapter7: Types And Costs Of Financial Capital
Section: Chapter Questions
Problem 11EP
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Transcribed Image Text: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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