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The Patrick Company's cost of common equity is 16 percent, its before-tax cost of debt is 13 percent, and its marginal tax rate is 40
The Patrick Company's cost of common equity is 16 percent, its before-tax cost of debt is 13 percent, and its marginal tax rate is 40 percent. The stock sells at book value. Using the following balance sheet, calculate Patrick's WACC. Assets Cash: $120 Accounts receivable: 240 Inventories: 360 Plant and equipment, net: 2,160 Total assets: 2,880 Liabilities and equity Long term-debt: $1,152 Common equity: 1,728 Total liabilities and equity: 2,880
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