10.9

WACC The Pawlson Company's year-end balance sheet is shown below. Its cost of com mon equity is 1896 its before-tax cost of debt is 8%, and its marginal ta rate is 40%. Assume that the firm's long-term debt sells at par value. The firm's total debt, which is the sum of the company's short-term debt and long term debt, equals $1,140. The firm has 576 shares of common stock outstanding that sell for $4.00 per share. Assets Liabilities And Equity Cash $ 120 Accounts payable and accruals $10 240 Short-term debt Long-term debt Common equity Accounts receivable Inventories Plant and equipment, net Total assets 40 1,100 1,730 $2,880 Total liabilities and $2,880 360 2,160 equity Ison's WACC using market-value weights. Round your answer to two decimal places. Do not round your intermediate calculations