Given information: Market Value of Company A Source of Capital Percent of total Rate of return Bonds 40% 6.2% Preferred Stocks 10% 8% Common Stocks 50% 12.4% Total: 100% Task A: Calculation of Weighted Average Cost of Capital (WACC) Formula for WACC = [D/V(1-Tc)Rd] + (E/V x Rc) + (E/V x Rp) Where: D/V = percentage of financing that is debt E/V = percentage of financing that is equity Tc = Corp. Tax Rate Rd = return on debt Rc = return on
Words: 578 - Pages: 3
