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Financial Forensics · Quiz 2 · 2 Apr 2023 · January 2023 term · Set QPE3

Question 13: Phil's Carvings wants to have a weighted average cost of…

Question 13

+1 markOne correct option

Phil's Carvings wants to have a weighted average cost of capital of 9.5 percent. The firm has an after-tax cost of debt of 6.5 percent and a cost of equity of 12.75 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?

  1. A

    0.84

  2. B

    1.08

  3. C

    0.76

  4. D

    0.67

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Correct answer

  • B

    1.08

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Question 13 of 25 in the IIT Madras BS Financial Forensics (Financial Forensics) Quiz 2 paper sat on 2 Apr 2023, in the January 2023 term (IIT M DEGREE AN3 EXAM QPE3 02 Apr 2023). It carries 1 mark.

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