# Question: the weighted average cost of capital wacc is calculated using...

###### Question details

The weighted average cost of capital (WACC) is calculated using the firm's target capital structure together with its after-tax cost of debt, cost of preferred stock, and cost of common equity.

A) What is Jana's weighted average cost of capital (WACC)?

TAX | T = | 40% |

WEIGHT OF DEBT | Wd = | 30% |

WEIGHT OF PS | Wps = | 10% |

WEIGHT OF EQUITY | Ws = | 60% |

COST OF DEBT | Rd = | ?? |

COST OF PS | Rps = | ?? |

COST OF EQUITY | Rs | ?? |

WACC = (wd *rd)*(1-T) + wps (rps) + ws (rs)

WACC = ???

B) What factors influence a company’s WACC?

C) What procedures are used to determine the risk-adjusted cost of capital for a particular division? What approaches are used to measure a division’s beta?