Partridge Pear Tree Farms holds equity and debt in its capital structure at equal weights. It does not have any preferred stock. The cost of equity capital is 14.59% while the before-tax cost of debt capital is 7.24%. If the company's tax rate is 21%, what is the company's weighted average cost of capital (WACC)?

Partridge Pear Tree Farms holds equity and debt in its capital structure at equal weights. It does not have any preferred stock. The cost of equity capital is 14.59% while the before-tax cost of debt capital is 7.24%. If the company's tax rate is 21%, what is the company's weighted average cost of capital (WACC)?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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