The Debt Capacity for Omicron's new project in year 0 is closest to:
A)$38.75
B)$75.50
C)$50.25
D)$10.25

Question

Quizplus · Accepted Answer

C)r_wacc = 11ea7cce_3c9b_0197_928c_e1a14fe319be_TB1626_11 r_E + 11ea7cce_3c9b_0198_928c_bfeb444e9223_TB1626_11 r_D(1 - τ_c),where D = net debt = Debt - Cash r_wacc = 11ea7cce_3c9b_28a9_928c_37164681b40a_TB1626_11 (.12)+ 11ea7cce_3c9b_28aa_928c_85a4e02e3291_TB1626_11 (.06)(1 - .35)= .0876 11ea7cce_3c9b_28ab_928c_43b835bad5a3_TB1626_11 = 11ea7cce_3c9b_4fbc_928c_5dc99928146e_TB1626_11 + 11ea7cce_3c9b_4fbd_928c_cb42ded5fb0d_TB1626_11 + 11ea7cce_3c9b_4fbe_928c_693d6cfb1cb4_TB1626_11 = $125.69 D₀ = d × 11ea7cce_3c9b_76cf_928c_af50448c0913_TB1626_11 D₀ = 11ea7cce_3c9b_76d0_928c_67d6c57be317_TB1626_11 ($125.69)= $50.28

The Debt Capacity for Omicron's New Project in Year 0