Wingslow Company has a cost of equity of 12%, a pre-tax cost of debt of 7%, and

Question

Wingslow Company has a cost of equity of 12%, a pre-tax cost of debt of 7%, and a tax rate of 35%. What is the firm's weighted average cost of capital if the debt-equity ratio is 0.60? Answer a. 10.01% b. 9.21% c. 6.58% d. 11.11% e. 10.13% Wingslow Company has a cost of equity of 12%, a pre-tax cost of debt of 7%, and a tax rate of 35%. What is the firm's weighted average cost of capital if the debt-equity ratio is 0.60? Wingslow Company has a cost of equity of 12%, a pre-tax cost of debt of 7%, and a tax rate of 35%. What is the firm's weighted average cost of capital if the debt-equity ratio is 0.60? 10.01% 9.21% 6.58% 11.11% 10.13% a. 10.01% b. 9.21% c. 6.58% d. 11.11% e. 10.13%

Explanation / Answer

b. 9.21%

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