fm10 10 - costs, but to save time, we shall assume r dAT =...

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Answers and Solutions: 10 - 10 Step 3 . Calculate the WACC: WACC = (D/V)(r dAT ) + (P/V)(r ps ) + (S/V)(r s or r e ) = 0.20(r dAT ) + 0.04(r ps ) + 0.76(r s or r e ). It would be appropriate to calculate a range of WACCs based on the ranges of component
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Unformatted text preview: costs, but to save time, we shall assume r dAT = 7.2%, r ps = 11.6%, and r s = 17.5%. With these cost rates, here is the WACC calculation: WACC = 0.2(7.2%) + 0.04(11.6%) + 0.76(17.5%) = 15.2%....
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