I need help with question 10-9. I do not understand the WACC workup. Can you please help me with step by step breakdown?

in Long-Term Assets: Capital Budgeting 1 0-9 WACC The Patrick Company's year-end balance sheet is shown below. Its cost of common equity is 16%, its before-tax cost of debt is 13%, and its marginal tax rate is 40%. Assume that the firm's long-term debt sells at par value. The firm's total debt, which is the sum oi the company's short-term debt and long-term debt, equals $1,152. The firm has 576 shares 10-10 10-11 of common stock outstanding that sell for $4.00 per share. Calculate Patrick's WACC using market-Value weights. Assets Liabilities and Equity Cash $ 130 Accounts payable and accruals $ 10 Accounts receivable 240 Short-term debt 52 Inventories 360 Long-term debt 1I1oo Plant and equipment, net 2,160 Common equity 1,728 Total assets $2,890 Total liabilities and equity 52,890 WACC Klose Outfitters Inc. believes that its optimal capital structure consists of 60% common equity and 40% debt, and its tax rate is 40%. Klose must raise additional capital to fund its upcoming expanSion. The firm Will have $2 mllllOI'l'Ol" retained earnings with a cost of rs .-: 12%. New common stoclc in an amount up. to $6 million would have a cost Of re : 15%. Furthermore, Klose can raise up to $3 million of debt at an interest rate of rd : 10% and an additional $4 million of debt at rd : 12%. The CFO estimates that a roposed expansion would require an investment of $5.9 million. What is the WACC for {he last dollar raised to complete the expanSion? WAcc AND PERCENTAGE OF DEBT leANCIl'lG Hook Industries's capital structure con- sists solely of debt and common eqth- It can Issue debt at 1'd = lila/rv find its common stock currently pays a $2.00 dividend per share (Do = $2.00)(; The stock s price is currently $24.75, . dividend is expected to grow at a constant rate ot 7 /0 per year, its tax rate is 35%, and its l/tNSlACC is 13.95%. What percentage of the company 5 capital structure consists of debt? WACC Midwest Electric Company (MEC) uses only "debt amd Cqmmon equity. It borrow unlimited amounts at an interest rate of rd : 10 /0 as long as it finances at its met - o t % common e uit . Its la td' r'd , ' Mk . e, which calls for 450/ debt and 55 q y S m end Capua; Sifglzilgrected constant growth rate is 4%, and its common stock sells for 5320. ME 5 ' was $ ' is 400/0 Two projects are available: Project A has a rate of return of 13%, and Project EX is {Oo/ol These two projects are equally risky and about as risky as the firm's 5 existing assets. I 7 What is its cost of common equity. n