Calculate the weighted average

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You now need to calculate the cost of debt for Tesla. Go to finra-markets.morningstar. com/BondCenter, enter Tesla as the company, and find the yield to maturity for each of Tesla's bonds. What is the weighted average cost of debt for Tesla using the book value weights and the market value weights? Does it make a difference in this case if you use book value weights or market value weights?

You now have all the necessary information to calculate the weighted average cost of capital for Tesla. Calculate the weighted average cost of capital for SMI using book value weights and market value weights assuming SMI has a 21 percent marginal tax rate. Which cost of capital number is more relevant?

Reference no: EM133061047

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