New wacc of glass glowers


Problem:

Glass Glowers has no debt. Its cost of capital is 8.7 percnt. Suppose the firm converts to a debt equity ratio of 0.65. The interest rate on the debt is 6.9 percent.

Requirement:

Question: What is the new WACC?

A. 7.99%

B. 8.13%

C. 8.36%

D. 8.44%

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Accounting Basics: New wacc of glass glowers
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