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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
WACC  The Patrick Company’s cost of common equity is 16%, its before-tax cost of debt is 13%, and its marginal tax rate is 40%. The stock sells at book value. Using the following balance sheet, calculate Patrick’s WACC.
Â
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Assets                                         Liabilities and Equity
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                                             ![]()
Cash                                 $  120
Accounts receivable                240
Â
|
Inventories |
360 |
Long-term debt |
$1,152 |
|
Plant and equipment, net |
  2,160 |
Common equity |
  1,728 |
|
Total assets |
$2,880 |
Total liabilities and equity |
$2,880 |
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