CFA Level 1
Corporate Finance

Calculate WACC for ABC Corporation

Easy Cost Of Capital Weighted Average Cost Of Capital

ABC Corporation is evaluating its capital structure and needs to determine its Weighted Average Cost of Capital (WACC). The firm has a debt-to-equity ratio of 0.5, the cost of equity is estimated at 12%, and the after-tax cost of debt is 5%. Assuming a corporate tax rate of 30%, what is the WACC for ABC Corporation?

Hint

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