I need your help with this formula: WACC=50x0.12+10x0.08+20X0.06x(1-0.35)=$7.58 Million
My first question is where does the 1 come from and how do I calculate the figures in parenthesis?
And can you help me with the rest of the problem.
Thank you your help is GREATLY appreciated.
We can show weighted average cost of capital (WACC) this way :
WACC= we x kce + wps x kps + wd x kd x (1-T)
kce = cost of common stock
kps = cost of preferred stock
kd = cost of debt
we= percentage of common stock in the capital structure
wps= percentage of preferred stock
wd= percentage of ...