bwBASIC/T80A/WACC.run

                            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