Answered

Westonci.ca offers quick and accurate answers to your questions. Join our community and get the insights you need today. Join our platform to connect with experts ready to provide detailed answers to your questions in various areas. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform.

Your firm uses half debt and half equity. The shareholders need to earn 20%. The firm can borrow at 5%. The risk free rate is 2%. The tax rate is 40%. Find the weighted average cost of capital.

Sagot :

Answer:

11.5%

Explanation:

WACC = weight of equity x cost of equity + weight of debt x cost of debt x (1 - tax rate)

We appreciate your visit. Hopefully, the answers you found were beneficial. Don't hesitate to come back for more information. We appreciate your time. Please come back anytime for the latest information and answers to your questions. We're here to help at Westonci.ca. Keep visiting for the best answers to your questions.