Determine what is the firm wacc

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Reference no: EM132769591

Problem 1: A firm has determined that it can minimize its weighted average cost of capital (WACC) with 40% debt and 60% equity in its capital raise. If the firm's cost of debt is 9% before taxes, the cost of equity is estimated to be 12% before taxes, and the tax rate is 40%, what is the firm's WACC?

a.4.32%
b.6.48%
c.9.36%
d.10.8%

Reference no: EM132769591

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