Purchase Solution

Weighted Average Cost of Capital

Not what you're looking for?

Ask Custom Question

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.

Purchase this Solution

Solution Summary

Capital structure weights and Weighted Average Cost of Capital have been calculated.

Solution Preview

The answers are in the attached file:
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 ...

Purchase this Solution


Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.