Question 9: Shrell Inc, is interested to know the Weighted Average Cost of Capital for all its financing. Following is source and cost of financing information of each of its assets. What will be the value of WACC for Shell Inc. if tax rate is 35% and firm uses book value of capital to compute WACC? Book Value Market Value After-tax cost 5,000,000 6,000,000 6.50% Source of Capital Long-Term Debt Preferred Stock Common Stock 90,000 110,000 10% 15% 10,000,000 15,090,000 13,000,000 19,110,000 Totals Question 10: Shrell Inc. is interested to know the Weighted Average Cost of Capital for all its financing. Following is source and cost of financing information of each of its assets. What will be the value of WACC for Shrell Inc. if tax rate is 35% and firm uses market value of capital to compute WACC? Book Value Market Value Cost of capital Source of Capital Long-Term Debt Preferred Stock $6,000,000 110,000 6.50% $5,000,000 90,000 10,000,000 15,090,000 Common Stock 10% 13,000,000 Totals 15% 19,110,000