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WACC calculation given company information

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Given:

* Company debt and other long-term obligations are US$14 million. The split for the US$14 million is US$5 million in bonds that are at 8% and US$9 million in a long-term loan at 7.5%
* Company equity is US$150.1 million.
* Cost equity (according to SML) is 9%.
* The company is in the 40% tax bracket.

Calculate the company's weighted-average cost of capital (WACC) using excel.

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Solution Summary

The solution shows how to calculate the WACC given certain information.

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You'll find the solution in the attached Excel file. The formulas in the cells should be straightforward. These are the steps that need to be taken in order ...

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