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    Question

    Cost of equity is 15%, cost of debt is 10%, debt-equity

    ratio is 1:1, tax rate 30%. What is WACC?
    A 12.5% Correct Answer Incorrect Answer
    B 13.5% Correct Answer Incorrect Answer
    C 11% Correct Answer Incorrect Answer
    D 10% Correct Answer Incorrect Answer

    Solution

    WACC = 0.5×15% + 0.5×10%(1–0.3) = 7.5% + 3.5% = 11%, 

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