Weighted average cost of capital american exploration, inc., a natural gas producer, is trying to decide whether to revise its target capital structure. currently it targets a 50-50 mix of debt and equity, but it is considering a target capital structure with 70% debt. american exploration currently has 6% after-tax cost of debt and a 12% cost of common stock. the company does not have any preferred stock outstanding. what is american explorations current wacc?

American Explorations current WACC is 9%

Explanation:

The computation of WACC is shown below:

= (Cost of equity × equity percentage) + (after-tax cost of debt × debt percentage)

= (12% × 50%) + (6% × 50%)

= 6% + 3%

= 9%

Since we have to compute only current WACC so we considered the 50-50 ratio. Hence, we ignored 70% cost of debt

WACC shows a relationship between debt, equity and the preferred stock.

answer; because many corporate watch groups will discover and publicize unethical behavior by suppliers, link it to the american company, and harm its reputation;

the answers are

a, b, c, & e.