Calculate WACC using market value weights

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Reference no: EM131077865

WACC The Patrick's Company's year-end balance sheet is shown below. Its cost of common equity is 16%, its before-tax cost of debit is 13%, and it marginal tax rate is 40%. Assume that the firms long term debt sells at par value. The firm has 576 shares of common stock outstanding to sell for $4.00 per share. Calculate Patrick's WACC using market value weights

Assets Liability and Equity

Cash - $130 Account payable and Accruals $10

Accounts receivable - 240 Short-term debt 52

Inventories – 360 Long-term 1,100

Plant and equipment, net - 2,160 Common Equity 1,728

Total Assets - $2,890 Total liabilities and equity $2,890

Reference no: EM131077865

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