Question: security type capital structure Required rate of return debt D=385.7 D/V =0.243 Rdebt = 0.09 or 9% common stock E=1,200.0 E/V=0.757 Requity =0.12 or 12%

security type	capital structure	Required rate of return
debt	D=385.7 D/V =0.243	Rdebt = 0.09 or 9%
common stock	E=1,200.0 E/V=0.757	Requity =0.12 or 12%
total	V=1.585.7

Based on the information given above:

a. Calculate companys WACC. b. If the company is excused from paying taxes, what would be its WACC? c. Suppose after being excused from paying taxes, company makes a large issue and pays all its debt with the proceeds. What would be the cost of capital of the company?

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