Bayt.com

Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

Stock10m. 10%Redeemable Preferred Stock2m. 8%Short-term Loan3m. 6%Bonds7m. Cost of equity12%&cost of debt8%. Tax rate 28%. Calculate WACC.

Financial Management Economics
user-image
Question added by Zaheer uddin Raja , Accounts Supervisor , Pakistan International Airlines
Date Posted: 2016/06/27
Upvote (0) Views (0) Followers (1) Answers (1) Report Question
Write an Answer
Register now or log in to answer.
Mohammed Altuwaijri

Value is 10m+2m+3m+7m =22m

 

WACC= (10/22)*0.12+(2/22)*0.10+[(3/22)*.08+(7/22)*.06]*(1-28)

WACC= 0.0636+0.0216= 0.0852 or 8.52 percent

Write Your Answer
More Questions Like This