Question
Cost of debt 5% Cost of equity 12.12% Share price 781.30 Beta 2.09 Tax rate 21% Book value weight 3.75% Market value weight 3.59% You
Cost of debt 5%
Cost of equity 12.12%
Share price 781.30
Beta 2.09
Tax rate 21%
Book value weight 3.75%
Market value weight 3.59%
You now have all the necessary information to calculate the weighted average cost of capital for Tesla. Calculate the weighted average cost of capital for Tesla using book value weights and market value weights assuming Tesla has a 21 percent marginal tax rate. Which cost of capital number is more relevant?
weight of equity is 100%
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Management Theory and Practice
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
2nd Canadian edition
176517308, 978-0176517304
