Principles of Corporate Finance

After Tax WACC

Example - Sangria Corporation - continued

Debt ratio = (D/V) = 50/125 = .4 or 40%

Equity ratio = (E/V) = 75/125 = .6 or 60%











+  ×











= −  ×

D V rE

E

r

V

D
WACC ( 1 Tc)