Question

What is the weighted average cost of capital if a business has a cost of equity of 12%, a cost of debt
of 10%, tax rate of 25%, 20 million market value of debt, and 60 million market value of equity?
0000
10.4%
9.8%
11.5%
10.9%
Page 5 of 20

Answer 1

To calculate the weighted average cost, divide the total cost of goods bought by the numeral of units available for sale. To find the cost of goods available for sale, you'll need the total amount of beginning products and recent purchases.

What is the weighted average cost method?

In accounting, the Weighted Average Cost (WAC) method of inventory valuation uses a weighted standard to determine the amount that goes into COGS and inventory. The weighted middle cost method divides the cost of goods available for sale by the number of units available for sale

How do you estimate the weighted average cost of capital?

WACC is calculated by multiplying the cost of each money source (debt and equity) by its appropriate weight by market value, and then adding the outcomes together to select the total.

To learn more about Weighted Average Cost, refer

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