WACC caculation. Bartlett Coomany's target capital structure is 40% debt, 15% preferred,45%common equity.The after-tax cost debt...
WACC caculation.
Bartlett Coomany's target capital structure is 40% debt, 15%
preferred,45%common equity.The after-tax cost debt is 6.00%, the
cost of preferred is 7.50% and the cost of common using reinvested
earnings is 12.75%.The firm will not be issuing any new stock. You
were hired as a consultant to help determine their cost of
capital.What is its weighted cost of capital (WACC)?
Homework Answers
WACC = 0.40(0.06) + 0.15(0.075) + 0.45(0.1275)
WACC = 9.26%
Weighted Average Cost of Capital = 9.26%
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WACC caculation.
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