Jemisens firm has expected earnings before interest and


Jemisen's firm has expected earnings before interest and taxes of $1,400. Its unlevered cost of capital is 15 percent and its tax rate is 35 percent. The firm has debt with both a book and a face value of $2,000. This debt has a 7 percent coupon and pays interest annually. What is the firm's weighted average cost of capital?

  • 13.51 percent
  • 13.45 percent
  • 13.68 percent
  • 14.36 percent
  • 13.98 percent

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Finance Basics: Jemisens firm has expected earnings before interest and
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