Determining the firm weighted average cost of capital


Problem: A firm has debt of $5,000, equity of $16,000, a cost of debt of 8%, a cost of equity of 12%, and a tax rate of 34%. What is the firm's weighted average cost of capital?

  • 7.29%
  • 7.94%
  • 8.87%
  • 10.40%
  • 11.05%

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Finance Basics: Determining the firm weighted average cost of capital
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