What is the WACC using only RE for equity component of WACC1?

WACC1 = wdkd(1 - T) + wpskps + wceks

= 0.3(10%)(0.6) + 0.1(9%) + 0.6(14%)

= 1.8% + 0.9% + 8.4% = 11.1%

= Cost per $1 till RE used up.

Previous slide

Next slide

Back to first slide

View graphic version