Question: the weighted average cost of capital wacc is calculated using...
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)?
|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?