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This is what you know for calculating the weighted average cost of capital (WACC): Has a model capital structure of 65% stock (S) and 35% debt (B)

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This is what you know for calculating the weighted average cost of capital (WACC):

• Has a model capital structure of 65% stock (S) and 35% debt (B).
• After-tax cost of debt is 6.78% (R_B).
• Cost of equity is 13.13% (R_S).

Calculate the WACC using this formula:

WACC = [S ÷ (S + B)] × R_S + [B ÷ (S + B)] × R_B