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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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Patrina Schowalter
Patrina SchowalterLv2
28 Sep 2019

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