Tuolumne Co. issues only common stock and bonds. The firm has a debt-equity ratio of 1/3. The cost of equity is 16.0 per

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answerhappygod
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Tuolumne Co. issues only common stock and bonds. The firm has a debt-equity ratio of 1/3. The cost of equity is 16.0 per

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Tuolumne Co. issues only common stock and bonds. The firm has adebt-equity ratio of 1/3. The cost of equity is 16.0 percent andthe pre-tax cost of debt is 6.0 percent. The tax rate is 21percent. What is its weighted average cost of capital (WACC)?
a) 13.19%
b) 11.90%
c) 12.26%
d) 10.41%
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