Actual CPA Problem

[Getback]

"Hi-Tech Inc. has determined that it can minimize its weighted-average cost of capital (WACC) by using a debt to equity ratio of 2/3. If the firm's cost of debt is 9% before taxes, the cost of equity is estimated at 12% before taxes, and the tax rate is 40%, what is the firm's WACC?

Hmmm, wonder if I will remember this one!  

[mensa180]

Nice.  My dad said the CPA exam was one of the hardest things he had ever done, especially since there were no calculators then.  Best of luck to you.

[Getback]

Nice.  My dad said the CPA exam was one of the hardest things he had ever done, especially since there were no calculators then.  Best of luck to you.

I thought it was ironic that they used Hi-tech as a company name.

Yep, it is tough. I'm actually humbled by the extraordinary amount of work I have put into it. Right now, not counting the practice tests or the actual cpa exams, I have done over 12,000 questions. Only 140 more questions and I am done with my last book. Well except for reviewing and taking the practice test. Should be sitting in about 10 days or less.

[mensa180]

If only I had that same resolve to study for the ACT.