A firm has debt of $5,000, equity of $16,000, a leveraged value of $8,900, a cost...
A firm has debt of $5,000, equity of $16,000, a leveraged value of $8,900, a cost of debt of 8%, a cost of equity of 12%, and a tax rate of 34%. What is the firm's weighted average cost of capital?
10.40% 11.05% 7.29% 7.94% 8.87%
Homework Answers
WACC=E/D+E*rE+D/D+E*rD*(1-T)
= (( 16000/5000+16000)*.12)+((5000/5000+16000)*.08)*(1-.34)
= 10.40%
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