Using The Information From The Table Determine The Weight On Equity Capital That Should Be Used To Calculate

Question

Using the information from the table, determine the weight on equity capital that should be used to calculate

Xena’s weighted-average cost of capital:

Xena Corp.

Total Assets $23,610

Interest-Bearing Debt (market value) $11,070

Average borrowing rate for debt 10.2%

Common Equity: Book Value $6,150

Market Value $25,830

Marginal Income Tax Rate 37%

Market Beta 1.73

Financial Accounting