Purchase Solution

Calculating the Weighted Cost of Capital

Not what you're looking for?

Ask Custom Question

Assume that the after-tax cost of debt is 7%, the cost of preferred stock is 9%, and the cost of common stock is 12%. Debt is 50% of long-term financing, preferred stock is 15%, and common stock is 35%. What is the weighted cost of capital?

I need help with this. I am not sure which formula to use and how to lay it out.

Purchase this Solution

Solution Summary

This solution helps calculate the weighted cost of capital.

Solution Preview

WACC is calculated by multiplying the cost of each capital component by its proportional weighting ...

Purchase this Solution


Free BrainMass Quizzes
Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Introduction to Finance

This quiz test introductory finance topics.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Basics of corporate finance

These questions will test you on your knowledge of finance.