Calculate the cost of capital using waac

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Reference no: EM132752092

Company A has a %21 tax rate . it has issued 20,000 shares of common stock and has equity of 900,000$. In addition the corporation has dept at a before tax rate of 5,25% in amounts as shown below on the relevant portion of the balance sheet.Further assumes the copmpanys beta is1.2.10- years us treusiers carry a rate of 0,98, and our analysis estimate a market return of 11.8%

Account payable 20,000

Note Payabale 10,000

Accruals 16,000

Cuurent Portion of long trem debt 27,260

Totatal Current Liabilities 73,260

Long Term Debts 568,334

Total Liabilities 641,594

Problem 1: Calculate the cost of capital using WAAC. Remember to use after tax values. Show your work

Reference no: EM132752092

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