# Calculate the weighted average cost of capital based on book value weights

# Calculate the weighted average cost of capital based on book value weights

Calculate the weighted average cost of capital based on book value weights. Assume an after-tax cost of new debt of 8.63 percent and a cost of common equity of

16.5 percent. b. The current market value of Genatrons long-term debt is $350,000. The common stock price is $20 per share and there are 30,000 shares

outstanding. Calculate the WACC using market value weights and the component capital costs in (a). c. Recalculate the WACC based on both book value and market

value weights assuming that the before-tax cost of debt will be 18 percent, the company is in the 40 percent income tax bracket, and the after-tax cost of common

equity capital is 21 percent