Market value-the costs of specific capital sources

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Reference no: EM132199986

You have compiled the following data regarding the market value & the costs of specific capital sources

Source of Capital                   After tax cost

Long term debt                             8%

Common stock equity              19%

Market price per share of your common stock is $50 & there are 7200 shares outstanding

Market value of your long term debt is $980 per bond with a total of 150 bonds that are issued

The WACC using the market value weights is:

a. 11.7%

b. 13.5%

c. 15.8%

d. 17.5%

Reference no: EM132199986

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