7. You are the CFO of a major manufacturer, and you are reviewing a report recently completed by a new financial analyst. You note that the weighted average cost of capital (WACC) was used in part of the analysis in the report the analyst had gathered the following inputs: Dividend yield 0.03 Forward P/E 15 Tax rate 0.25 Trailing P/E Net profit margin 0.10 Debt/equity ratio 0.75 Risk-free rate 0.02 Total asset tumover 5.25 The analyst used the following formula to estimate the WACC: WACC = (weight for debt)" (cost of debt) + (weight for equity)*(cost of equity) 0.0775 = (0.75)*(0.08) (0.25)*0.07) 16 Identify and correct any potential errors in the analysts WACC calculation