Question: Problem 11-24 Flotation Cost (LG11-2) What does the 1 represent. Why is 1 being used? WACC = (D/A)*Debt Cost + (E/A)*Equity Cost WACC = (0.70/1.70)*6%

Problem 11-24 Flotation Cost (LG11-2)

What does the "1" represent. Why is "1" being used?

WACC = (D/A)*Debt Cost + (E/A)*Equity Cost WACC = (0.70/1.70)*6% + (1.00/1.70)*15% WACC = 11.29%

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