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Which of the following correctly describe the computation of the firm's weighted average cost of capital (WACC)? I. (E/V) + ke + (D/V) + YTM

Which of the following correctly describe the computation of the firm's weighted average cost of capital (WACC)?

I. (E/V) + ke + (D/V) + YTM + (1 Tc) where Tc = corporate tax rate

II. (E/V) x ke x (1 Tc) + (D/V) x YTM

III. (E/V) x ke + (D/V) x YTM x (1 Tc)

IV. (E/V) + ke + (D/V) + YTM

Answers...

I only

II only

III only

IV only

I and III only

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