Presley Cleaners has an all-equity capital structure with an equity value of $94,260.The expected earnings are $11,320 based on estimated sales of $60,000.The firm pays no taxes and can borrow at 6.4 percent.What is the value of R_WACC? A)12.01% B)12.29% C)11.83% D)12.34% E)12.16%

Question

Quizplus · Accepted Answer

R_WACC = R₀ = $11,320 / $94,260 = 0.1201,or 12.01%

Presley Cleaners Has an All-Equity Capital Structure with an Equity