Transitions Inc.is an import-export company specializing in products from Asia and the West Coast.It can borrow in the debt market at 8%.Its cost of equity with 40% D/V ratio is 12%.Its corporate tax rate is 30%.If the M&M world of taxes holds true,what is the WACC for Transitions Inc.with a 40% D/V financing?
A) 7.20%
B) 8.00%
C) 8.64%
D) 9.44%
Correct Answer:
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