Note: if there is no allocation to preferred stocks, you can ignore the component from preferred stocks. tax rate 9% Amount % weight before-tax cost after-tax cost cost component after-tax cost *% weight weighted average cost of capital (WACC) Firm Debt 2,394,319,260.00 2,394,150,000.00 Equity 169,260.00 Preferred 0.00 99.99% 0.01% 0.00% 4.09% 7.49% 66551.72% 0.04 0.07 665.52 0.04 0.00 0.00 3.71% 8-1 Weighted average cost of capital What does the WACC mean? 1) The average cost of financing or hurdle rate for the business