Calculate WACC (Weighted average cost of capital) for Company B
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Company B has the present capital structure (see values and market data in attached file) which is considered optimal.
Calculate the company's weighted average cost of capital (WACC) using book value weights and market value weights.
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This solution carefully lists the parameters used in calculating the WACC, and provides one alternative solution.
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I have assumed all debts mature on 9/23, i.e. I have assumed that the 2005 debt matures in exactly one year.
I have assumed debt figures are in millions.
If short term debt is a ...
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