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Consider the Following Equation

Question 13

Multiple Choice

Consider the following equation:
Rwacc = Consider the following equation: R<sub>wacc</sub> = R<sub>E</sub> + R<sub>D</sub>(1 - τ<sub>c</sub>) The term r<sub>D</sub>(1 - τ<sub>c</sub>) in this equation is: A) the required rate of return on debt. B) the dollar amount of equity. C) the after tax required rate of return on debt. D) the required rate of return on equity.
RE + Consider the following equation: R<sub>wacc</sub> = R<sub>E</sub> + R<sub>D</sub>(1 - τ<sub>c</sub>) The term r<sub>D</sub>(1 - τ<sub>c</sub>) in this equation is: A) the required rate of return on debt. B) the dollar amount of equity. C) the after tax required rate of return on debt. D) the required rate of return on equity.
RD(1 - τc)
The term rD(1 - τc) in this equation is:


A) the required rate of return on debt.
B) the dollar amount of equity.
C) the after tax required rate of return on debt.
D) the required rate of return on equity.

Correct Answer:

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