Toronto Skaters Company is an all-equity company and is able to fund a $1 million investment using cash.The company has a beta of 1.4,the risk-free rate is 3 percent,and the return on the market is 8 percent.Flotation costs for new equity are 2 percent.The tax rate is 40 percent.What is the WACC of the investment?
A) 14.2%
B) 10%
C) 8%
D) 6.6%
Correct Answer:
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