A company has a cost of equity of 15%, cost of debt of 10%, and a tax rate of 40%. If the company's debt-to-equity ratio is 1, what is the WACC?


4. A company has a cost of equity of 14%, cost of debt of 9%, and a tax rate of 35%. If the company's debt-to-equity ratio is 0.75, what is the WACC?

 
5. A company has a market value of equity of $2,000,000, market value of debt of $1,000,000, cost of equity of 10%, cost of debt of 6%, and a tax rate of 25%. What is the WACC?

 
6. A company has a market value of equity of $1,000,000, market value of debt of $500,000, cost of equity of 12%, cost of debt of 8%, and a tax rate of 30%. What is the WACC?

 
7. Metals Corp. has $575,000 of debt, $50,000 of preferred stock, and $1,125,000 of common equity. Metals Corp.'s after-tax cost of debt is 4.25%, preferred stock has a cost of 5.35%, and newly issued common stock has a cost of 12.75%. What is Metals Corp.'s weighted average cost of capital?

Answer rating: 100% (QA)

3 To calculate the WACC we can use the formula WACC EV Re DV Rd 1 T Where E market value of equity D market value of debt V total market value of equi... View the full answer