Kizspy | Question: 8
(Choose 1 answer)
Poly's Parrot Shops has found that its cost of common equity is 17 percent. It has 7-year maturity semiannual bonds outstanding with a price of $767.03 that have a coupon rate of 7 percent. The firm is financed with $120,000,000 of common shares (market value) and $80,000,000 of debt. What is the after-tax weighted average cost of capital for Poly's, if it is subject to a 35 percent marginal tax rate? Round your final percentage answer to two decimal places.
Α. 10.20%
Β. 11.76%
C. 11.88%
D. 13.32%
