Homework #6G (WACC)
Question 1 (1 point)
Given the following information on Big Brothers, Inc. capital structure, compute the company’s weighted average cost of capital (WACC). The company’s marginal tax rate is 40%.
Round the answer to two decimal places in percentage form. (Write the percentage sign in the “units” box)
Type of CapitalPercent of Capital StructureBefore-Tax Component CostBonds55%14.45%Preferred Stock12%13.03%Common StockPlease calculate it17.01%Your Answer: