Tulloch Manufacturing has a target debt-equity ratio of 62 which indicates that they have $.62 of debt for each $1.00 of equity. Its cost of equity is 14.3 percent, and its pretax cost of debt is 9.3 percent. If the tax rate is 38 percent, compute the following:
The weight (percent) of debt is:
The weight (percent) of equity is:
The aftertax cost of debt is:
The WACC is: