What is the firms weighted average cost of capital if the


1. Brown Street Grocers has a cost of equity of 14.4 percent, a pre-tax cost of debt of 8.7 percent, and a tax rate of 34 percent. What is the firm's weighted average cost of capital if the debt-equity ratio is .55?

2. Windsor's has a $50 million bond issue outstanding that currently has a market value of $49.5 million. The bonds mature in 12 years and pay semiannual interest payments of $40 each per $1,000 of par value. What is Windsor's pre-tax cost of debt?

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Financial Management: What is the firms weighted average cost of capital if the
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