Eaglet Corporation has the following target and costs associated with its capital structure. Based on these parameters what is Eaglet Corporations weighted average cost of capital?
Target common equity weight:............80 percent
Target debt weight:..............................20 percent
Cost of equity:......................................15 percent
Cost of debt:...........................................5 percent
Tax rate:................................................35 percent
WACC = 12.65 percent
WACC = 8.45 percent
WACC = 13.00 percent