Just Kickin is a vertically integrated company that grows creatively hybridized crops and incorporates them into clothing and furniture, which they sell in their own stores across the United States.

Just Kickins debt financing comes exclusively from 3-year notes, which they issue as needed, generally once or twice per year. They consistently pay off these notes as possible, always before the due date, but otherwise repaying the highest-interest notes first. Their most recent issuance was in December 2022 on a $375,000 note for 6.65%.

Just Kickin has never issued preferred stock, but pays a regular dividend on their common stock. The risk-free interest rate is 4.6%; the current market risk premium is 5.5%.

Required:

a. Use the data above and in the spreadsheet to calculate Just Kickins Weighted Average Cost of Capital. Assume that the companys capital structure is at their planned levels. Base your WACC calculation on the larger of book value or market value.

b. If Just Kickinhad delayed their last note issuance until March 2023, the interest rate would have been 6.9%. Would this have affected their WACC calculation? Explain.