Weighted Average Cost of Capital

In a world of corporate taxes only, show that the WACC can...

Question

Weighted Average Cost of Capital


    In a world of corporate taxes only, show that the WACC can be written as WACC =RU ×[1-TC(D/V)].

Robert · Accepted Answer

Question:
In a world of corporate taxes only, show that the WACC can be written as WACC = RU * [1 - Tc(D/V)].
Solution:

Weighted Average Cost of Capital In a world of corporate taxes only, show that the WACC can be written as WACC =R U ×[1-T C (D/V)].