Mad Computers, Inc has got the following capital structure: A €441,6 M (million) bond issuance and several different loans that amount to €122,8 M, whose average interest rate is 8,24%. Additionally, it has got a €106,2 M preferred stock issuance that pays a fixed 9,2% coupon. And last, there is equity (capital + retained earnings) worth €97,1 M, whose required return is 16,4%. Please compute the WACC of Mad Computers if the company is subject to a 40% income tax bracket.

Answer rating: 100% (QA)

To calculate the Weighted Average Cost of Capital WACC for Mad Computers we need to calculate the cost of each component of the capital structure and ... View the full answer