Calculate patricks wacc using market value weights

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Reference no: EM13335204

The Patrick 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 has 576 shares of common stock outstanding that sell for $4.00 per share. Calculate Patrick's WACC using market value weights.

Assets		Liabilities And Equity
Cash	$ 120
Accounts receivable	240
Inventories	360	Long-term debt	$1,261
Plant and equipment, net	2,160	Common equity	1,619
Total assets	$2,880	Total liabilities and equity	$2,880

Reference no: EM13335204

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