Calculate a firm's WACC given that the total value of the firm is $2,000,000, $600,000 of which is debt, the cost of debt and equity is 10% and 15% respectively, and the firm pays no taxes:
A) 9.0%
B) 11.5%
C) 13.5%
D) 14.4% WACC = .10(600,000/2,000,0000) + .15(1,400,000/2,000,000)
= ) 10(.3) + .15(.7)
Correct Answer:
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