00:01
We need to calculate the peaceful booking binding company's weighted average cost of capital, known as wacc.
00:08
So wacc, which is weighted average cost of capital, is evaluated as e, which is the market value of common equity, divided by v, multiplied by r, which is the cost of common equity, to which we add p, which is the market value of preferred stock, divided by v, multiplied by r, which is the cost of preferred stock, to which we add d, which is the market value of debt, divided by v, multiplied by r, and r stands for the cost of debt, to which we multiply it by 1, wherein we subtract the tax rate, which is the corporate tax rate.
00:51
So, given to us the values, re is 30 .20%, sorry 20, rp is 9 .90%, rd is 8 .70%, then tax rate is 40%.
01:17
After that, market value of equity, which is e value, is $8 ,80 ,000.
01:30
Then p value is $78 ,000 and d value is $7 ,50 ,000...