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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%
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