Suppose the weighted average cost of capital of the Gadget Company is 10%. If Gadget has a capital structure of 50% debt and 50% equity, a before-tax cost of debt of 5%, and a marginal tax rate of 20%, then its cost of equity capital is closest to

A. 12%.
B. 14%.
C. 16%.

Answer: C. 16%.

Business

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At October 1, Arcade Fire Enterprises reported stockholder's equity of $35,000. During October, common stock of $2,000 was issued and the company earned a net income of $7,000. If the stockholder's equity at October 31, totals $40,000, what amount of dividends were paid during the month?

A. $0 B. $2,000 C. $4,000 D. $5,000

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All of the following are sources of insurability information about life insurance applicants EXCEPT

A) inspection reports B) the application C) Social Security reports D) Medical Information Bureau reports"

Business