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Chapter 20

Total market value = $17.5m + $1.75m + $2.1m + $0.4648m + $2m = $23.8148m

V e V d
WACC = ––––––– k e + ––––––– ‘k d(1 – T)’
V e + V d V e + V d

WACC = $17.5m/$23.8148m × 16.2 + $1.75m/$23.8148m × 5.1 +
$2.1m/$23.8148m × 4 + $0.4648m/$23.8148m × 5.7 + $2m/$23.8148m × 4.9

WACC = 11.90 + 0.37 + 0.35 + 0.11 + 0.41

WACC = 13.1%

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