Problem:
Cookie Dough Manufacturing has a target debt-equity ratio of 0.5. Its cost of equity is 15 percent, and its cost of debt is 11 percent.
Required:
Question: What is the firm's WACC given a tax rate of 31 percent?
- 12.53 percent
- 12.78 percent
- 13.11 percent
- 13.48 percent
- 13.67 percent
Note: Be sure to show how you arrived at your answer.