Question
A firm has an effective (after-tax) cost of debt of 4%, and its weight of debt is 40%. Its equity cost of capital is 9%,
A firm has an effective (after-tax) cost of debt of 4%, and its weight of debt is 40%. Its equity cost of capital is 9%, and its weight of equity is 60%.Calculate the firm's weighted average cost of capital (WACC). [Enter your answer as a percentage rounded to two decimal places.]
Hide hint for Question 10
WACC=rD(1-Tc)D%+rE*(E%)
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Financial Markets and Institutions
Authors: Frederic S. Mishkin, Stanley G. Eakins
8th edition
013342362X, 978-0133423624
