Cosmic Corp. has a proposed investment with an initial cost of $84 million. Debt represents 44 percent of the capital structure. The cost of equity is 14.5 percent, the pretax cost of debt is 5.45 percent, and the tax rate is 21 percent. What is the company's WACC? Multiple Choice 8.31% 9.00% 10.29% 10.52% 10.01%
Cosmic Corp. has a proposed investment with an initial cost of $84 million. Debt represents 44 percent of the capital structure. The cost of equity is 14.5 percent, the pretax cost of debt is 5.45 percent, and the tax rate is 21 percent. What is the company's WACC? Multiple Choice 8.31% 9.00% 10.29% 10.52% 10.01%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Cosmic Corp. has a proposed investment with an initial cost
of $84 million. Debt represents 44 percent of the capital
structure. The cost of equity is 14.5 percent, the pretax cost
of debt is 5.45 percent, and the tax rate is 21 percent. What
is the company's WACC?
Multiple Choice
8.31%
9.00%
10.29%
10.52%
10.01%
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