                            WACC

A FIRM MAY BE FINANCED IN SEVERAL DIFFERENT WAYS. AMONG THESE
ARE COMMON STOCKS, PREFERRED STOCKS, DEBT, AND RETAINED
EARNINGS. GIVEN THE AMOUNT OF EACH OF THE ABOVE AND ITS
COST IN PER CENT THIS PROGRAM WILL FIND OUT WHAT PRICE THE
FIRM IS PAYING FOR ITS MONEY ON AVERAGE. THIS AVERAGE IS
CALLED THE WEIGHTED AVERAGE COST OF CAPITAL (WACC).

PRESS ENTER TO BEGIN? 
INPUT CURRENT AMOUNT OF DEBT            ? 123456
INPUT CAPITAL DEVOTED TO PREFERRED STOCK? 987654
INPUT COMMON STOCK CAPITAL              ? 583234
INPUT RETAINED EARNINGS                 ? 9283432

THE FOLLOWING INPUTS ARE AFTER TAX COST

INPUT COST OF DEBT (%)                 ? 5
INPUT COST OF PREFERRED STOCK (%)      ? 7
INPUT COST OF COMMON STOCK (%)         ? 1
INPUT COST OF RETAINED EARNINGS (%)    ? 2
METHOD OF FINANCING    PROPORTION   COST     WEIGHTED COST
                         (%)        (%)          (%)

DEBT       0.0        5.0          0.00
PREFERRED STOCK      62.9        7.0          4.40
COMMON STOCK      37.1        1.0          0.37
RETAINED EARNINGS       0.0        2.0          0.00
WEIGHTED AVERAGE COST OF CAPITAL                   4.77

PRESS ENTER FOR MORE COMPUTATION? -1
