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I'm having a hard time completing this equation. Need to find the After Tax Weighted Average Cost of Capital (WACC). Below is the info. Here
I'm having a hard time completing this equation. Need to find the After Tax Weighted Average Cost of Capital (WACC). Below is the info.
Here is the given information:
Cost of Debt (Before tax)
9.00%
Cost of Equity
16.00%
Percentage of debt capital
60.00%
Percentage of Equity capital
40.00%
Tax rate
35.00%
Value $100,000
After tax WACC Formula = (E/V * Ke) + (D/V) * Kd * (1 - Tax rate)
- E = Market Value of Equity.
- V = Total market value of equity & debt.
- Ke = Cost of Equity.
- D = Market Value of Debt.
- Kd = Cost of Debt.
- Tax Rate = Corporate Tax Rate.
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