Question 7 Given are the following data: Cost of debt ro 6%; Cost of equity re 12.1%; Marginal tax rate - 35%; and the firm has 50 percent debt and 50 percent equity. Calculate the after-tax weighted average cost of capital (WACC). O 7.1 percent 9 percent 8 percent 5.9 percent

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Question 7
Given are the following data: Cost of debt ro = 6%; Cost of equity = re = 12.1%; Marginal tax rate
- 35%; and the firm has 50 percent debt and 50 percent equity. Calculate the after-tax weighted
average cost of capital (WACC).
O 7.1 percent
9 percent
8 percent
O 5.9 percent
Transcribed Image Text:D Question 7 Given are the following data: Cost of debt ro = 6%; Cost of equity = re = 12.1%; Marginal tax rate - 35%; and the firm has 50 percent debt and 50 percent equity. Calculate the after-tax weighted average cost of capital (WACC). O 7.1 percent 9 percent 8 percent O 5.9 percent
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