Charlotte's Crochet Shoppe has 15,500 shares of common stock outstanding at a price per share of $79 and a rate of return of 11.77 percent. The company also has 320 bonds outstanding, with a par value of $2,000 per bond. The pretax cost of debt is 6.21 percent and the bonds sell for 98.4 percent of par. What is the firm's WACC if the tax rate is 39 percent?
A. 9.06%
B. 8.58%
C. 10.31%
D. 9.88%
E. 8.75%

Question

01-07-2021
Business

Answered

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Charlotte's Crochet Shoppe has 15,500 shares of common stock outstanding at a price per share of $79 and a rate of return of 11.77 percent. The company also has 320 bonds outstanding, with a par value of $2,000 per bond. The pretax cost of debt is 6.21 percent and the bonds sell for 98.4 percent of par. What is the firm's WACC if the tax rate is 39 percent?
A. 9.06%
B. 8.58%
C. 10.31%
D. 9.88%
E. 8.75%

Sagot :

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ariana5346 ariana5346 · Answer 1 · 2021-07-01T10:51:44-04:00

ariana5346 ariana5346

01-07-2021

A
I believe that is the answer
Because it should be 9.06%

Answer Link

Sagot :

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