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WACC The Patrick Company's year-end balance sheet is shown below. Its cost of common equity is 18%, its before-tax cost of debt is 11%, and
WACC
The Patrick Company's year-end balance sheet is shown below. Its cost of common equity is 18%, its before-tax cost of debt is 11%, and its marginal tax rate is 40%. Assume that the firm's long-term debt sells at par value. The firms total debt, which is the sum of the companys short-term debt and long-term debt, equals $1,098. The firm has 576 shares of common stock outstanding that sell for $4.00 per share. Calculate Patrick's WACC using market value weights. Round your answer to two decimal places.
Assets | Liabilities And Equity | ||
Cash | $ 120 | Accounts payable and accruals | $ 10 |
Accounts receivable | 240 | Short-term debt | 48 |
Inventories | 360 | Long-term debt | $1,050 |
Plant and equipment, net | 2,160 | Common equity | 1,772 |
Total assets | $2,880 | Total liabilities and equity | $2,880 |
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