Company A's balance sheet shows $400 million in debt, $75 million in preferred stock, and $325 million in total common equity. Company A's tax rate is 30%,rd = 7%,rps = 6.2%, andrs = 15%. If A has a target capital structure of 35% debt, 10% preferred stock, and 55% common stock, what is Company A's WACC?

Company B's balance sheet shows $100 million in debt, $10 million preferred stock, and $90 million in total common equity. Company B's tax rate is 27%,rd = 5%,rps = 3.4%, andrs = 9%. If B has a target capital structure of 25% debt, 5% preferred stock, and 70% common stock, what is Company B's WACC?

Answer rating: 100% (QA)

To calculate the weighted average cost of capital WACC for both Company A and Company B we need to c... View the full answer