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You want to calculate a firms WACC. You know that the firm has total assets of $5 million and total debt of $2 million. You

  1. You want to calculate a firms WACC. You know that the firm has total assets of $5 million and total debt of $2 million.
    1. You also know that the interest expense last year was $100,000. What is the firms cost of debt?
    2. The expected return on the market is 10% and the risk-free rate is 3%. The firms beta is 1.3. Using CAPM, what is the firms cost of equity?
    3. The tax rate is 30%. What is the firms WACC?

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