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Alcon has the following capital structure and component costs of capital (in thousands): Debt $ 30,000 (30%) Equity $ 70,000 (70%) Total Capital $100,000 (100%)
Alcon has the following capital structure and component costs of capital (in thousands): Debt $ 30,000 (30%) Equity $ 70,000 (70%) Total Capital $100,000 (100%) Yield-to-maturity on existing bonds: 6.57% Estimated Cost of Equity: 10% Marginal Tax Rate 40% Compute the weighted average cost of capital (WACC): WACC = Wd*Kd(1-T) + We*Ke A. 8.97% B. 8.29% C. 8.18% D. 7.65% E. 5.38%
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