Given below is the data regarding investments of AlliTen Inc.: Market value of the company's equity = $600,000, market value of the company's debts = $500,000, total market value = $1.1 million, cost of equity = 0.8%, before-tax cost of debt = 0.6%, and corporate tax rate is 35%.
Calculate the weighted average cost of capital of AlliTen Inc.
A) 4%
B) 5.1%
C) 6.1%
D) 7%
Correct Answer:
Verified
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