WACC The Patrick Company's cost of common equity is 16%, its before-tax cost of debt is 13%, and its marginal tax rate is 40%. The stock sells at book value. Using the following balance sheet, calculate Patrick's WACC.
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Assets
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Cash
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$ 120
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Accounts receivable
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240
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Inventories
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360
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Plant and equipment, net
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2,160
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Total assets
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$2,880
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Liabilities and Equity
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Long-term debt
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$1,152
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Common equity
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1,728
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Total liabilities and equity
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$2,880
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