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AFP Certified Treasury Professional CTP Question # 369 Topic 14 Discussion

AFP Certified Treasury Professional CTP Question # 369 Topic 14 Discussion

CTP Exam Topic 14 Question 369 Discussion:
Question #: 369
Topic #: 14

Company XYZ has determined that its weighted average cost of capital is 12.5%. The capital structure of the company is made up of 75% equity and 25% debt. The before-tax cost of debt is 10%. Given a tax rate of 34%, what is XYZ's cost of common stock?


A.

13.25%


B.

14.47%


C.

15.25%


D.

16.53%


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