T1 KCT 5 (Tutorial)

You've just rotated into the Qantas capital budgeting team as a

graduate recruit and the CFO has called the first acquisitions meeting of the

year.

Everybody is given the following capital structure and cost summary: 

Qantas has

equity of $10.5 billion and debt of $6.4 billion. Shareholders need to earn 16%

p.a., which is a 700 basis point premium above what creditors need to earn.

Vince, the CFO, then asks ...

     " Calculate

the WACC of Qantas.”

(enter your answer as a pure number percentage e.g. 11.11 without %, $ or commas, to 2 decimal places. Warning: not following these instructions may result in Moodle not being able to recognise your answer and auto-marking your answer as wrong. Do not enter the percentage as a decimal. e.g. 11.11% answer is typed in as 11.11, not 0.11, which is a decimal.)