Adjusted

WACC.

Clark Explorers, Inc., an engineering firm, has the following capital structure:

	Equity	Preferred Stock	Debt
Market Price	$86.25	$223.95	$1020.47
Outstanding units	140,000	6,000	6,012
Book value	$3,468,000	$1,238,000	$6,012,000
Cost of capital	15.35%	11.16%	8.1%

Using market value and book value (separately, of course), find the adjusted WACC for Clark Explorers at the following tax rates:

a.35%

b.25%

c.15%

d.5%

a.What is the market value adjusted WACC for Clark Explorers at a tax rate of 35%?

What is the book value adjusted WACC for Clark Explorers at a tax rate of 35%?

b.What is the market value adjusted WACC for Clark Explorers at a tax rate of 25%?

What is the book value adjusted WACC for Clark Explorers at a tax rate of 25%?

c.What is the market value adjusted WACC for Clark Explorers at a tax rate of 15%?

What is the book value adjusted WACC for Clark Explorers at a tax rate of 15%?

d.What is the market value adjusted WACC for Clark Explorers at a tax rate of 5%?

What is the book value adjusted WACC for Clark Explorers at a tax rate of 5%?