Jonkin and CO's before tax cost of debt is 9%, its marginal tax rate is 34%, and its cost of equity is 14%. The company's stock sells at book value, and it has just published its most recent balance sheet below:
Calculate Jonkin's weighted average cost of capital(WACC):
Assets: Liabilities:
Cash $120 Long Term Debt $1152
Accounts Reciavable $240 Common equity $1728
Net fixed Assets $2880 Total Liabilites and Equity $2880
Total Assets $2880