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Calculating the weighted cost of capital

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WACC 10 Calculating the Weighted Cost of Capital

WACC = weighted avg. cost of capital defined as the average after tax cost of a company's various capital sources including common stock, preferred stock, bonds and any other long term debt.

WCC= weight x after tax cost     

Target Capital Structure of Common              65%

Target Percent Debt                                        35%

Cost of Equity                                                 14%

Cost of Debt                                                     6%

Tax Rate                                                          35%

Weight        Cost        Tax    After Tax Cost               WACC

                                                                           Cost Tax Rate        

Common Stock

Capital                     65%            14%                       14.00 %                        9.10%

Debt                        35%              6%         35%         3.90%                         1.37%

Total                      100%                                             WACC                      10.47%

Calculations: I need help with the formula and step by step information to find the answer. I can calculate the information on my own.

Reference no: EM131879803

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