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A company has a market value of $500 million. It has a market value of equity of of $200 million, a market value of long term debt of $150 million and a market value of short term ebt of $150 million. The cost of equity is 12% the cost of long term debt is 8%, and the cost of short term debt is 6%. The marginal tax rate is 35%. What is the weighted average pre tax cost of capital (WACC) for this company? (Show formula please)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91615494

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