MAKE IT IN EXCEL

USE THIS FOFMULA: WACC = equity / (equity +debt) x cost of equity + debt (equity +debt) x cost of debt x (1-tax rate)

Calculate the weighted average cost of capital (WACC), considering that Company W has a total value of debt and equity of EUR 1,246,890, and hold 40% in debt. The cost of equity is of 6% and the company borrows at a cost of 3%. Company D pays 35% tax.

An investor bought shares of Company W and as a return on investment of 3%, did he made a cost-effective decision?