Pepi's Pizza Parlour has a cost of debt of 6% and a cost of equity of 10%. The firm has 100,000 shares of common stock outstanding at a book price of $20 a share. Shares are now trading at $22. The bond issue has a total face value of $400,000 and sells at 98% of face value. The tax rate is 34%. What is the weighted average cost of capital for Pepi's Pizza Parlour?

Answer rating: 100% (QA)

To calculate the weighted average cost of capital WACC for Pepis Pizza Parlour we need to consider t... View the full answer