25%, the pretax cost of debt is 5%, and the cost of preferred stock is 7%. The
corporation’s weighted average cost of capital (WACC) is %. This is calculated to two
decimal places using the following formula:
WACC = WCS × CCS + WPS × CPS + WD × CD
5.54
A corporation’s capital structure is
52% debt and 48% preferred equity
. The tax rate is
35%, the pretax cost of debt is 9%, and the cost of preferred stock is 12%. The
corporation’s weighted average cost of capital (WACC) is %. This is calculated to two
decimal places using the following formula:
o
8.8
A company’s capital structure is
51% debt, 21% preferred, and 28% common equity
.
The tax rate is 50%, the after-tax cost of debt is 3.65%, the cost of preferred stock is
6.8%, and the cost of common equity is 19.37%. The company’s weighted average cost
of capital (WACC) is %. This is calculated to two decimal places using the following
formula:
WACC = WCS × CCS + WPS × CPS + WD × CD
8.71
A firm’s capital structure is
15% common equity and 85% debt
. The cost of common
equity is 17%, and the after-tax cost of debt is 4.18%. The firm’s weighted average cost
of capital (WACC) is %. This is calculated to two decimal places using the following
formula:
o
6.1

A firm’s capital structure is
37% common equity and 63% preferred equity
. The cost of
common equity is 18%, and the cost of preferred equity is 12%. The firm’s weighted
average cost of capital (WACC) is %. This is calculated to two decimal places using the
following formula:
o
14.22
A company’s capital structure is 25% preferred equity and 75% common stock. The tax
rate is 60%, the cost of preferred stock is 17.14%, and the cost of common equity is
19.65%. The company’s weighted average cost of capital (WACC) is %. This is calculated
to two decimal places using the following formula:
o
19.02
A corporation’s capital structure is 20% debt, 10% preferred, and 70% common equity.
The tax rate is 30%, the pretax cost of debt is 10%, the cost of preferred stock is 6%, and
the cost of common equity is 20%. The corporation’s weighted average cost of capital
(WACC) is %.
o
16

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- Summer '13
- Cost Of Capital, Debt, Corporation, Weighted average cost of capital