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Calculation of Cost of Capital using WACC formula

Suppose we have determined the target capital structure. Interest rates are 5% in the US, 8% in Brazil, the corporate tax rates are 30% and 50%, respectively. The cost of equity is 12% in the US and 16% in Brazil. The company raises $20,000,000 is in the US equity market, $40,000,000 in the US debt market and (ISO BRL) R$80,000,000 in the Brazilian debt market. The spot F/X rate is R$1.80$ (1.80 Brazilian Real = $1). Find the weighted average cost of capital

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M9165545

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