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Firm B has Total Assets of $ 4,000,000. The firms Owners Equity at the beginning of the year was $2,800,000. The firms Net Income for
Firm B has Total Assets of $ 4,000,000. The firms Owners Equity at the beginning of the year was $2,800,000. The firms Net Income for the year was $ 400,000 and Dividends totaled $ 200,000 There was no Owners Investment for the year. Based on all information given please determine the firms Weighted Average Cost of Capital assuming an Earnings Before Tax of $ 500,000 and a Cost of Debt equal to 6%.
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