Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

تمرين 44

Medzyme Pharmaceuticals has maintained a 50-50 D-E mix for capital investments. Equity capital has cost 11%; however, debt capital that histori­cally cost 9% has now increased by 20% per year.
If Medzyme does not want to exceed its historical weighted average cost of capital (WACC), and it is forced to go to a D-E mix of 75-25, the maximum acceptable cost of equity capital is closest to:
a) 7.6%
b) 9.2%
c) 9.8%
d) 10.9%