Question

Take It All Away has a cost of equity of 10.78 percent, a pretax cost of debt of 5.43 percent, and a tax rate of 40 percent. The company's capital structure consists of 76 percent debt on a book value basis, but debt is 36 percent of the company's value on a market value basis. What is the company's WACC

Answer 1

Take It All Away has a cost of equity of 10.78 percent, a pretax cost of debt of 5.43 percent, and a tax rate of 40 percent. The company's capital structure consists of 76 percent debt on a book value basis, but debt is 36 percent of the company's value on a market value basis.

Step-by-step explanation:

What is the company's WACC?

8.07%

10.68%

8.85%

9.44%

6.41%