Weighted Average Cost of Capital
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OUR Corp. has a current capital structure of $18 million in secured bonds paying 6.5% annual interest, and common stock with a market value of $42 million. Its marginal tax rate is 40% and its cost of common equity capital is 13%.
a. What are the capital structure weights?
b. Calculate the company's Weighted Average Cost of Capital.
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Solution Summary
Capital structure weights and Weighted Average Cost of Capital have been calculated.
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OUR Corp. has a current capital structure of $18 million in secured bonds paying 6.5% annual interest, and common stock with a market value of $42 million. Its marginal tax rate is 40% and its cost of common equity capital is 13%.
a. What are the capital structure ...
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