This workout asks us to calculate the WACC for the below company We're given some information: the cost of equity cost, the cost of debt, a tax rate, equity value and debt value In order to calculate our WACC, we're going to do two sub calculations first The first of these is the proportion of funding from debt In order to do this, I take my debt and I divide it by all of my other sources of funding (being debt and equity) So 66.7% of my funding comes from debt, I now take my equity and divide that by my sources of funding And perhaps unsurprisingly, the two of them add up to 100% So 66.7% from debt, 33.3% from equity So now let's put that together in our WACC formula The WACC formula says you take your cost of equity and multiply it by the portion of funding from equity We then add onto that, our cost of debt. But that cost of debt has to be post tax So I multiply that by one minus the tax rate That gives me my cost of debt post tax, multiply that by the proportion of funding from debt Gives me my eventual answer of 5.8% You might notice, we had to put some brackets in the formula for the 1-C8 (the one minus tax rate) We needed to calculate that first before then doing the multiplications and then eventually doing the last addition