I tried to compute the cost of WACC for the company nike. I wasn't sure if i did the calculations right or if I got the put what i should in the cost of debt.

WACC

Cost of equity : 7.48 percent

Cost of debt : 6.58 percent

Total Debt/Equity (mrq) 140.57

Tax rate : 34 percent

Cost of equity = 3,639,900 (number of outstanding shares) x 22.18 (nike stock price) =80732982.00

Cost of debt = 6.58 % x .66 = 4.34 percent

V = D + E = 4.34 + 8073282.00 = 8073286.34

WACC = (80732982.00/8073286.34) *(7.48 percent /4.34) * 6.58 % * (1-.34) =74.85 percent

WACC is a firms cost of capital. This is the cost of capital across all of the sources. This means that 74.85 percent is the return that the share holders can invest. ((It shows investors the opportunity cost on the risk of putting money into this company.

(E/V * Ke) + (D/V) * Kd * (1 Tax rate)

WACC: Now that you have obtained the cost of equity and cost of debt for your company. Find the companys Total Debt/Total Equity Ratio on Yahoo Finance under Statistics. Assume the tax rate is 34%. Compute the weighted average cost of capital (WACC) for your company. What does this mean?