Question: Please help with following MCQ question one Datatech Ltd is currently 100% financed with equity and its weighted average cost of capital (WACC), which is

Please help with following MCQ

question one

Please help with following MCQ question onePlease help with following MCQ question onePlease help with following MCQ question one
Datatech Ltd is currently 100% financed with equity and its weighted average cost of capital (WACC), which is the same as its cost of equity, is equal to 13%. Assuming that, the Miller and Modigliani's Proposition 1 hold (where all three of the assumptions remain in effect), and the firm is thinking about changing its capital structure to 45% debt and 55% equity, what will be the cost of equ_ity after the change if the cost of debt is 6%? Q A. 18.73% 0 B. 21.56% 0 c. 20.1% 0 D. 23.61% A three-year project has cash inflows and cash outflows which when present valued (discounted) at 12% give a Net Present Value (NPV) of zero (R0). Which one of the following statements is true? 0 A. The IRR cannot be determined from the above information. Q B. The IRR is greater than 12%. O C. The Internal Rate of Return (IRR) is 12%. O D. The IRR is less than 12%. Brimstone Ltd has a debt-to- equity ratio of 25%. Its pre-tax cost of debt is 10% and its cost of equity is 16%. The tax rate for companies is 28%. What is the company's weighted average cost of equity (WACC)? O A. 14.5% 0 B. 14.24% 0 c. 14.8% 0 D. 13.8%

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