Firm weighted average cost of capital

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Reference no: EM131356357

Jemisen's firm has expected earnings before interest and taxes of $1,400. Its unlevered cost of capital is 12 percent and its tax rate is 34 percent. The firm has debt with both a book and a face value of $2,100. This debt has an 8 percent coupon and pays interest annually. What is the firm's weighted average cost of capital?

a) 11.04 percent

b)11.51 percent

c) 11.89 percent

d) 10.98 percent

e) 11.21 percent

Reference no: EM131356357

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