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Compute the weighted average cost of capital for startbucks as of the start of year +1. startbucks had $550 million in outstanding interest-bearing debt on

Compute the weighted average cost of capital for startbucks as of the start of year +1.

startbucks had $550 million in outstanding interest-bearing debt on the balance sheet and no preferred stock. Assume that the balance sheet value of starbuck's debt is approximately equal to the market value of debt. Assume that at the start of year +1, starbucks will incur interest expense of 6.25% on debt capital and that starbucks' average tax rate is 33%.

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