medium · Principles of Finance cost-of-capital-structure
A company's capital structure consists of $60 million in market value of equity and $40 million in market value of debt. The cost of equity is 12%, the pre-tax cost of debt is 8%, and the marginal tax rate is 25%.
What is the company's Weighted Average Cost of Capital (WACC)?
- 10.4%
- 7.2%
- 9.6%
- 10.0%
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