Problem:
Glass Glowers has no debt. Its cost of capital is 8.7 percnt. Suppose the firm converts to a debt equity ratio of 0.65. The interest rate on the debt is 6.9 percent.
Requirement:
Question: What is the new WACC?
A. 7.99%
B. 8.13%
C. 8.36%
D. 8.44%