question 5

The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 18%, its before-tax cost of debt is 9%, and its marginal tax rate is 25%. Assume that the rm's long-term debt sells at par value. The rm's total debt, which is the sum of the company's short-term debt and long-term debt, equals $1,200. The rm has 576 shares of common stock outstanding that sell for $4.00 per share. Assets Liabilities And Equity Cash S 120 Accounts payable and accruals Accounts receivable 240 Short-term debt 50 Inventories 360 Long-term debt 1,150 Plant and equipment, net 2,160 Common equity 1,670 Total assets $2,880 Total liabilities and equity $2,880 Calculate Paulson's WACC using market-value weights. Do not round intermediate calculations. Round your answer to two decimal places. %