Question
A company has Rs. 20,00,000 equity (Ke = 15%) and Rs.
10,00,000 debt (Kd = 10% post-tax). Calculate Weighted Average Cost of Capital (WACC).Solution
Total = 30,00,000. Weights: Equity = 20/30 = 0.667, Debt = 10/30 = 0.333. WACC = (0.667×15) + (0.333×10) = 10 + 3.3 = 13.3%.
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