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Charlotte's Crochet Shoppe has 15,800 shares of common stock outstanding at a price per share of...

Charlotte's Crochet Shoppe has 15,800 shares of common stock outstanding at a price per share of $80 and a rate of return of 11.81 percent. The company also has 330 bonds outstanding, with a par value of $2,000 per bond. The pretax cost of debt is 6.23 percent and the bonds sell for 98.7 percent of par. What is the firm's WACC if the tax rate is 40 percent?

Multiple Choice

  • 8.59%

  • 10.34%

  • 9.06%

  • 9.91%

  • 8.75%

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Answer #1

Particulars Equity capital amount $1,264,000.00 [amount /total] market value weights 0.6599 cost of capital 11.81% [ weights

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