Question

Company X has debt and equity as sources of funds. Company X has market value of debt as $150000 and book value of debt as $80000. The company has book value of equity as $100000 and market value of equity as $125000. The cost of debt is 8.25% and cost of equity is 9.57%. the tax rate is 38%. What is the weighted average cost of capital(WACC)?

a. 7.59%
b. 7.78%
c. 7.14%
d. 7.68%​

Answer 1

Answer:

Option A. 7.59%

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