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Precision Cuts Has a Target Debt-Equity Ratio of 0

Question 88

Multiple Choice

Precision Cuts has a target debt-equity ratio of 0.55.Its cost of equity is 15.4 percent,and its pretax cost of debt is 7.8 percent.If the tax rate is 32 percent,what is the company's WACC?


A) 10.20 percent
B) 10.72 percent
C) 10.91 percent
D) 11.28 percent
E) 11.82 percent

Correct Answer:

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