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The Patrick Company's year-end balance sheet is shown below. It's cost of common equity is 16%, its before-tax cost of debt is 13%, and its marginal...
The Patrick Company's year-end balance sheet is shown below. It's cost of common equity is 16%, its before-tax cost of debt is 13%, and its marginal tax rate is 40%.Assume that the firm's long-term debt sells at par value. The firm has 576 shares of common stock outstanding that sell for $4.00 per share. Calculate Patrick's WACC using market value weights.
Assets:
Cash 120
Accounts receivable 240Inventories 360 Plant & Equipment, net 2160 Total Assets 2880
Liabilities & Equity:
Long term debt 1152
Common Equity 1728
Total Liabilities & Equity 2880