A firm has debt of $12,000,a leveraged value of $26,400,a pre-tax cost of debt of 9.20 percent,a cost of equity of 17.6 percent,and a tax rate of 37 percent.What is the firm's weighted average cost of capital?
A)11.47 percent
B)11.52 percent
C)11.69 percent
D)12.23 percent
E)12.48 percent

Question

Quizplus · Accepted Answer

WACC = {[($26,400 - $12,000)/$26,400] × 0.176} + [($12,000/$26,400) × 0.092 × (1 - 0.37)] = 12.23 percent

A Firm Has Debt of $12,000,a Leveraged Value of $26,400,a