Stock sells at book value-weighted average cost of capital

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Reference no: EM131327007

Jonkin & Co.'s before tax cost of debt is 11%, its marginal tax rate is 40%, and its cost of equity is 13%. The company's stock sells at book value and it has just published its most recent balance sheet below: Calculate Jonkin's weighted average cost of capital (WACC)

Assets($): Cash-120, Accounts Recievable-240, Net Fixed Assets-2160. Total Assets=2880

Liabilities and Equity($): L/T Debt-1152, Common Equity-1728. Total Liabilities & Equity=2880

Reference no: EM131327007

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