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NARRBEGIN: Never-Crash Airlines Never-Crash Airline

Question 1

Multiple Choice

NARRBEGIN: Never-crash Airlines
Never-crash Airline
Never-crash Airline has a capital structure that consists of 30% debt and 70% equity. The company’s cost of debt is 7%. The company has a beta of 1.9. The risk free rate equals 4.5% and the expected return on the market portfolio is 15%.
NARREND

-What is Never-crash Airline's WACC,if their marginal tax rate equals 34%?


A) 19.22%
B) 24.45%
C) 18.50%
D) 4.62%

Correct Answer:

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