Can anybody help? Question 5 1 pts Kokapeli, Inc. has a target capital structure of 40%...

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Question 5 1 pts Kokapeli, Inc. has a target capital structure of 40% debt and 60% common equity, and has a 21% marginal tax

Can anybody help?

Answer 1

Answer #1

The WACC is computed as shown below:

= cost of debt x (1 - tax rate) x weight of debt + cost of equity x weight of equity

= 0.055 x (1 - 0.21) x 0.40 + 0.13 x 0.60

= 9.54% Approximately

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Answer 2

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