Question: B C D E F G H I J K L M N o 18.00% 9.00% 40.00% 576 $4.00 Yes A 1 WACC 2 3

 B C D E F G H I J K LM N o 18.00% 9.00% 40.00% 576 $4.00 Yes A 1 WACC

B C D E F G H I J K L M N o 18.00% 9.00% 40.00% 576 $4.00 Yes A 1 WACC 2 3 Cost of common equity (rs) 4 Before-tax cost of debt (ra) 5 Marginal tax rate (T) 6 Common shares outstanding 7 Current stock price 8 Long-term debt sells at par value 9 10 Balance Sheet: 11 Assets 12 Cash 13 Account receivable 4 Inventories 15 Plant and equipment, net 16 Total assets 17 18 19 Market value of total debt 20 Market value of common equity 21 Total capital 22 23 Percentage of debt 24 Percentage of common equity 25 26 After-tax cost of debt 27 28 Weighted Average Cost of Capital (WACC) 29 30 31 $120.00 $240.00 $360.00 $2,160.00 $2,880.00 Liabilities and Equity Accounts payable and accruals Short-term debt Long-term debt Common equity Total liabilities and equity $10.00 $64.00 $1,050.00 $1,756.00 $2.880.00 Formulas #N/A #N/A #N/A #N/A #N/A #N/A #N/A

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