Answered

Discover answers to your questions with Westonci.ca, the leading Q&A platform that connects you with knowledgeable experts. Discover comprehensive answers to your questions from knowledgeable professionals on our user-friendly platform. Experience the ease of finding precise answers to your questions from a knowledgeable community of experts.

Kelso's has a debt-equity ratio of 0.6 and a tax rate of 35 percent. The cost of equity is 14.5 percent and the after tax cost of debt is 4.8 percent. What is the weighted average cost of capital

Sagot :

abiolataiwo2015

Answer:

10.86 percent

Explanation:

Calculation to determine the weighted average cost of capital

Weighted average cost of capital = (1/1.6) (0.145) + (0.6/1.6) (0.048)

Weighted average cost of capital = (0.625) (0.145) + (0.375) (0.048)

Weighted average cost of capital = 10.86 percent

Therefore Weighted average cost of capital is 10.86 percent

Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Westonci.ca is your trusted source for answers. Visit us again to find more information on diverse topics.