Galt's WACC is closest to:
A)6.0%
B)9.6%
C)10.3%
D)10.7%

Question

Quizplus · Accepted Answer

C)Using APV = V^L = V^U + T_cD = 11ea7cce_3cb6_2ada_928c_6dec2742c41b_TB1626_11 + (40%)$80 million = $232 million r_wacc = r_u - dT_c[r_{d +}ϕ(r_u- r_d)] whereϕ = 1 with permanent debt and d = 11ea7cce_3cb6_2adb_928c_e198d581c0c3_TB1626_11 r_{wacc = 12% -} 11ea7cce_3cb6_51ec_928c_17c76d596015_TB1626_11 (40%)[6% + 1(12% - 6%)] = .103448 or: r_{wacc = 12% -} 11ea7cce_3cb6_51ed_928c_ad124d5bfb6b_TB1626_11 (40%)(12%)= .103448

Galt's WACC Is Closest To