The fontenot companys cost of common equity is 13 percent, Ask an Expert

Finance

The fontenot company's cost of common equity is 13 percent, its before tax cost of debt is 8 percent and its marginal tax rate is 40 percent. Given Fontenot's market value capital structure below, calculate its WACC.

Long-term debt $10,000,000

common equity 20,000,000

total capital $30,000,000

A. 10.27%

B. 9.73%

C. 6.8%

D. 11.33%

E. 8.90%

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92325982

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