Calculate the wacc using market value weights

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Reference no: EM13949096

Common equity is 16% and its before tax cost is 13% and its marginal tax rate is 40%. Assume that the firm's long term debit sells at par value. The firm has 576 shares of common stock outstanding that sells for $4.00 per share. Calculate the WACC using market value weights.

Assets Liabilities & Equity

Cash $120

Accts Rec $240

Inventories $60 Long term debt $1152

Plant & Equipment $2160 Common Equity $1728

Total Assets $2880 Total liabilities & Equity $2880

Reference no: EM13949096

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