Question

If D is the market value of a firm's debt, E the market value of that same firm's equity, V the total value of the firm (E+D), RD the yield on the firm's debt, TC is the corporate tax rate, and RE the cost of equity, the weighted average cost of capital is:

Answer 1

The Weighted average cost of capital is

(D*RD*(1-TC))/(V) + (RE*E)= weighted average cost of capital

Step-by-step explanation: