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AFP Certified Treasury Professional CTP Question # 394 Topic 17 Discussion

AFP Certified Treasury Professional CTP Question # 394 Topic 17 Discussion

CTP Exam Topic 17 Question 394 Discussion:
Question #: 394
Topic #: 17

If a company has $126 million in debt at an average cost of 7% and $234 million in equity at a cost of 11%, what is its weighted average cost of capital, assuming a marginal tax rate of 35% and a risk-adjusted rate of 13%?


A.

8.7%


B.

9.6%


C.

10.0%


D.

10.9%


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