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Author Question: With participating life insurance you can lower your premiums by changing your lifestyle. ... (Read 61 times)

melly21297

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on: Jul 11, 2018
With participating life insurance you can lower your premiums by changing your lifestyle.
 
  Indicate whether the statement is true or false

Question 2

Determine the WACC for Cranston Retail Inc. the firm has a before-tax cost of debt of 6.50, a cost of equity of 11.50, and a tax rate of 30.00.
 
  The firm finances 40 of its assets with debt and 60 with equity. Further the risk-free rate is 3.00 and the firm has a beta of 1.20.
  A) 8.15
  B) 8.72
  C) 9.06
  D) 10.14


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polinasid

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Reply #1 on: Jul 11, 2018
Answer to Question 1

FALSE

Answer to Question 2

B
Explanation: B) WACC = Wd  Kd (1-t) + We  Ke) = .40((6.50)(1-.30 ) + .60  11.5 = 8.72.


melly21297

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Reply #2 on: Jul 11, 2018
Thank you


polinasid

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Reply #3 on: Jul 11, 2018
No problemo


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