Given are the following data: Cost of debt = rD = 6.0%; Cost of equity = rE = 12.1%; Marginal tax rate = 35%; and the firm has 50% debt and 50% equity.Calculate the after-tax weighted average cost of capital (WACC) :
A) 8.0%.
B) 7.1%.
C) 9.0%.
D) 5.9%.
Correct Answer:
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