PPT Slide
4. From Proposition I, for all firms in same risk class WACC = ksU. Verify using WACC formula.
WACC = wdkd + wceks = (D/V)kd + (S/V)ks
= ( )(8.0%)
+( )(16.33%).
WACC = 2.24% + 11.76% = 14.00%.
$1,000,000
$3,571,429
$2,571,429
$3,571,429
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