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  3. 6. a company's board of directors is considering t

6. A company's board of directors is considering the plan for capital expenditures. A director...

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Accounting

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6. A company's board of directors is considering the plan for capital expenditures. A director asks the chief financial officer how the appropriate rate of return is set for evaluating capital expenditures. The CFO responds that the company uses the after-tax weighted average cost of capital and that the current value is 13 percent. If the combined tax rate is 45 percent, the before-tax cost of borrowed capital is 14 percent, and equity comprises 60 percent of the capitalization of the company, what is the percent return to shareholders

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