Calculate WACC given the following information (BT means before tax). Total Value of Common Stocks (S) $800,000 Cost of Equity (common...

80.2K

Verified Solution

Question

Finance

Calculate WACC given the following information (BT means beforetax).
TotalValue of Common Stocks (S) $800,000 Costof Equity (common stocks, Ks) 16%
TotalValue of Preferred Stocks (P) $200,000 Costof Preferred stock (Kp) 12%
TotalValue of Debt (D) $400,000 BeforeTax Cost of Debt (BT Kd) 6%
Taxrate (T) 30%
none of the answers is correct
19.95%
9.04%
13.56%
12.06%
American Electric Power is planning to purchase mac or pccomputers for its business operations from Sweden. The cost of macor pc computers is 10,000 Swedish kronas. How much in U.S. dollarswill American Electric Power pay if $1 is equal to 6.7797 Swedishkronas (Swedish krona/$)?
$2,644
none of the answers is correct
$1,475
$1,686
$1,180

Answer & Explanation Solved by verified expert

4.1 Ratings (409 Votes)

SEE THE See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Calculate WACC given the following information (BT means beforetax).TotalValue of Common Stocks (S)$800,000Costof Equity (common stocks, Ks)16%TotalValue of Preferred Stocks (P)$200,000Costof Preferred stock (Kp)12%TotalValue of Debt (D)$400,000BeforeTax Cost of Debt (BT Kd)6%Taxrate (T)30%none of the answers is correct19.95%9.04%13.56%12.06%American Electric Power is planning to purchase mac or pccomputers for its business operations from Sweden. The cost of macor pc computers is 10,000 Swedish kronas. How much in U.S. dollarswill American Electric Power pay if $1 is equal to 6.7797 Swedishkronas (Swedish krona/$)?$2,644none of the answers is correct$1,475$1,686$1,180

TotalValue of Common Stocks (S)	$800,000	Costof Equity (common stocks, Ks)	16%
TotalValue of Preferred Stocks (P)	$200,000	Costof Preferred stock (Kp)	12%
TotalValue of Debt (D)	$400,000	BeforeTax Cost of Debt (BT Kd)	6%
		Taxrate (T)	30%