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Solve weighted average cost of capital for delta lighting

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Reference no: EM132956300

Problem 1: Delta Lighting has 24,500 shares of common stock outstanding at a market price of R19 a share. This stock was originally issued at R21 per share. The firm also has a bond issue outstanding with a total face value of R250,000 which is selling for 94% of par. The cost of equity is 12.6% while the after-tax cost of debt is 5.8%. The firm has a beta of 1.33 and a tax rate of 23%. Calculate the weighted average cost of capital?

Reference no: EM132956300

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