Problem:
Jeminsen's has expeted before interest and taxes of 6200. it's unlevered cost of capital is 14% and its tax rate is 34%. the firm has debt with both a book and a faec value of 2500. this debt has a 9% coupon and pays interest annually.
Required:
What is the firm's weighted average cost of capital?
A. 12.48 percent
B. 13.6 percent
C. 13.87 percent
D. 14.14 percent
E. 14.37 percent
Note: Please answer in proper manner and show all computations