Consider the information for the following four firms.
|
Firm
|
Cash
|
Debt
|
Equity
|
rD
|
rE
|
tc
|
|
Eenie
|
0
|
150
|
150
|
5%
|
10%
|
40%
|
|
Meenie
|
0
|
250
|
750
|
6%
|
12%
|
35%
|
|
Minie
|
25
|
175
|
325
|
6%
|
11%
|
35%
|
|
Moe
|
50
|
350
|
150
|
7.50%
|
15%
|
30%
|
Which is the weighted average cost of capital for Meenie closest to?
A) 10.5%
B) 7.4%
C) 10.0%
D) 8.8%