If the weighting of equity in total capital is 1/3, that of debt is 2/3, the return on equity is 15% that of debt is 10% and the corporate tax rate…

CA Intermediate · Financial Management and Strategic Management · MTP · September 2026
If the weighting of equity in total capital is 1/3, that of debt is 2/3, the return on equity is 15% that of debt is 10% and the corporate tax rate is 32%, what is the Weighted Average Cost of Capital (WACC)?
(A) (A) 10.533%
(B) (B) 7.533%
(C) (C) 9.533%
(D) (D) 11.350%

Suggested Answer and Working Notes:

Correct Answer: Option (C)

(C) 9.533%

Topics: Part-A: Financial Management

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