Calculate pawlson wacc using market-value weights

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WACC

The Pawlson Company's year-end balance sheet is shown below. Its cost of common equity is 18%, its before-tax cost of debt is 9%, and its marginal tax rate is 40%. Assume that the firm's long-term debt sells at par value. The firm's total debt, which is the sum of the company's short-term debt and long-term debt, equals $1,194. The firm has 576 shares of common stock outstanding that sell for $4.00 per share.

Assets Liabilities And Equity Cash$ 120 Accounts payable and accruals$ 10 Accounts receivable 240 Short-term debt 54 Inventories 360 Long-term debt 1,140 Plant and equipment, net 2,160 Common equity 1,676 Total assets$2,880 Total liabilities and equity$2,880

Calculate Pawlson's WACC using market-value weights. Round your answer to two decimal places. Do not round your intermediate calculations.

Reference no: EM131742479

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