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Financial Forensics · Quiz 2 · 6 Aug 2023 · May 2023 term

Question 15: Phil's Carvings wants to have a weighted average cost of…

Question 15

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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

    0.92

  3. C

    1.08

  4. D

    0.76

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Correct answer

  • C

    1.08

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Question 15 of 25 in the IIT Madras BS Financial Forensics (Financial Forensics) Quiz 2 paper sat on 6 Aug 2023, in the May 2023 term (IIT M DEGREE AN3 EXAM QPE3 06 Aug 2023). It carries 1 mark.

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