The formula for the adjusted WACC = $\frac { D } { V }$ × R_d + $\frac { \mathrm { PS } } { \mathrm { V } }$ × R_ps + $\frac { E } { V }$ × R_e × (1 - T_c).

Question

Quizplus · Accepted Answer

The formula for the adjusted Weighted Average Cost of Capital (WACC) does not typically include the complex variables and subscripts shown. A more standard formula is: WACC = ($\frac{D}{V}$ × Rd × (1 - Tc)) + ($\frac{E}{V}$ × Re) + ($\frac{PS}{V}$ × Rps), where D is the value of debt, E is the value of equity, PS is the value of preferred stock, V is the total value (D+E+PS), Rd is the cost of debt, Re is the cost of equity, Rps is the cost of preferred stock, and Tc is the corporate tax rate.

The Formula for the Adjusted WACC = DV\frac { D } { V }VD​

The Formula for the Adjusted WACC = $\frac { D } { V }$