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What is the WACC for Lee Family Firms?

What is the WACC for Lee Family Firms?

Attatched is an excel template of the company information if you scroll all the way over. It has two projects: Francis Lightfoot and Richard Henry. The problem is #13 and the answer to the problem is 3.89%.

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Formula
Weighted Average cost of capital (WACC) =
(Weight of equity * cost of equity) + (weight of debt * cost of debt)

Computation of weights
We shall compute market weights of debt and equity
Equity Capital = Price per share * number of shares
= $45 * 35,000
= $1,575,000
Debt Capital = Price ...

Solution Summary

Computations done for you.

$2.19