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CTP · Question #829
CTP Question #829: Real Exam Question with Answer & Explanation
The correct answer is C. 8.7%. See the full explanation below for the reasoning.
Question
- (Topic 9) What is the Weighted Average Cost of Capital for XYZ Company, assuming the following: The pre-tax cost of long term debt is 8% The cost of equity is 11% The marginal tax rate is 33% Total liabilities = $75,000 Long term debt = $50,000 Owners equity = $75,000
Options
- A7.2%
- B7.8%
- C8.7%
- D12.4%
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