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The after tax cost of debt is 12 and that of equity is 18

A firm has a total market value of $100 millions. The market value of debt is $40 millions and that equity is $60 millions. The after tax cost of debt is 12% and that of equity is 18%. Calculate the weighted average cost of capital (Assume tax rate T= 35%)

a. 12.32%

b. 13.92%

c. 13.2%

d. 15.6%

e. none of the above

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Finance Basics: The after tax cost of debt is 12 and that of equity is 18

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