Blended cost of financing the business with debt + equity.
Average cost of financing a business (debt + equity).
Formula
WACC = (E/V x Re) + (D/V x Rd x (1-T))
Equity as a share of total capital (0 to 1)
Debt as a share of total capital (0 to 1)
7.4%
0.6 x 10% + 0.4 x 5% x (1-0.3) = 7.1%
