In the previous question (95), What is the value of after-tax WACC, assuming that the company pays tax at a 35% rate?
Weighted average cost of capital (WACC) represents a firm’s average after-tax cost of capital from all sources, including common stock, preferred stock, bonds, and other forms of debt. WACC is the average rate that a company expects to pay to finance its assets.
The signature of the function should be like:
def WACC(E, D, V,Re, Rd, Tc):
Use the following formula,
WACC = (E/V)Re)+((D/V)Rd*(1-Tc)
where,
E=Market value of the firm’s equity D=Market value of the firm’s debt V=E+D Re=Cost of equity Rd=Cost of debt Tc=Corporate tax rate
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