Eaglet corporation has the following target and costs


Eaglet Corporation has the following target and costs associated with its capital structure. Based on these parameters what is Eaglet Corporations weighted average cost of capital?

Target common equity weight: 60 percent

Target debt weight: 40 percent

Cost of equity: 13 percent

Cost of debt: 6 percent

Tax rate: 35 percent

A) WACC = 9.36 percent

B) WACC = 6.63 percent

C) WACC = 10.20 percent

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Financial Management: Eaglet corporation has the following target and costs
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