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Weighted Average cost of capital - Alcoa Inc.

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Calculate Weighted Average Cost of Capital (WACC) for Alcoa, Inc. Please show all work.

Here is the end of year reports for 2009
http://www.alcoa.com/global/en/investment/pdfs/2009_Annual_Report.pdf

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Solution Summary

The expert calculates the weighted average cost of capital for Alcoa, Inc.

Solution provided by:
Sonia Agarwal, CA
Education
  • Chartered Accountant (Equivalent to CPA in US), Institute of Charted Accountants of India
  • Bachelor of Commerce, West Bengal University
Recent Feedback
  • "I got this feedback and I wanted to know if you can explain it to me. I noticed something within your workings which I believe is incorrect.  It looks like you've mistaken the Debt ratio for the Equity Multiplier.  You've done a calculation to determine Return on Equity (ROE) but if you take a look at the ratios provided for us you'll see ROE listed on the bottom line already.  You can use ROE, Profit Margin and Total Asset Turnover to figure out the Equity Multiplier amount.  Equity multiplier is not provided for us and we need to calculate it.  I really hope this is helpful to you.  "
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