Question: Need help in part B, C, and D 3. Weighted Average Cost of Capital] Voice River, Inc. is interested in estimating its weighted average cost
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3. Weighted Average Cost of Capital] Voice River, Inc. is interested in estimating its weighted average cost of capital (WACC) now that it is in its rapid growth stage. Voice River has a $500,000,10 percent interest, short-term bank loan, a \$1.5 million, 12 percent long-term debt isstle, and 42 million in common equity. The venture is in a 35 percent income tax bracket. A. Determine the after-tax costs of the bank loan and the long-term debt issue. B. Calculate the WACC for Voice River, Inc., using the cost of common equity capital estimated in Problem 12 (18.6\%). SOLUTION: I C. Estimate the WACC if the cost of common equity capital is 20 percent. D. Estimate the WACC if the cost of common equity capital is at the representative target rate of 25 percent for typical ventures in their late rapid-growth life cycle state
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