WACC Example :

A company want to raise money, the company will sell RM10,000 of

common stock, the expected return is 15%. Moreover, the company will
issue RM5,000 of debt, the cost of debt is 12% and the tax rate is 30%.
Find the WACC.

Total Value of the company : Wd = 0.33

RM10,000 + RM5,000 = RM15,000 Rd = 0.12
T = 0.3
Weight Debt : 5/15 = 0.33 We = 0.67
Re = 0.15
Weight Equity : 10/15 = 0.67

WACC = Wd*Rd(1-t) + We*Re

WACC = 0.33*0.12(1-0.3) + 0.67*0.15 = 0.1282 @ 12.82%