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5. Using the information below, please complete the calculation of the weighted average cost of capital for Sample company: Number of shares outstanding 58.1 million
| 5. Using the information below, please complete the calculation of the weighted average cost of capital for Sample company: | ||||
| Number of shares outstanding | 58.1 | million | ||
| Market price of shares outstanding | $ 52.00 | |||
| Market value of debt equals the book value of debt | ||||
| Pretax cost of debt | 8.00% | |||
| Marginal tax rate | 27.00% | |||
| Cost of equity | 12.00% | |||
| Component | Component cost | Component value | Component weight | Weighted cost |
| Debt | ||||
| Equity | ||||
| Weighted average cost of capital ................................................................................................ |
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Local Public Finance
Authors: René Geissler, Gerhard Hammerschmid, Christian Raffer
1st Edition
3030674681, 978-3030674687
