Given the following information for PepsiCo, determine the company’s weighted average cost of capital.
Value Cost of Capital
Restaurant Division $ 5 Billion 13%
Snack Foods Division 7 Billion 12%
Beverages Division 13 Billion 8%
a.10.12%
b.11.00%
c.12.10%
d.13.00%
The weighted average cost of capital is derived after taking into consideration the weightings, for each finance source. Therefore WACC = 13% (5/25) + 12% (7/25) + 8% (13/25).
Value Cost of Capital
Restaurant Division $ 5 Billion 13%
Snack Foods Division 7 Billion 12%
Beverages Division 13 Billion 8%
a.10.12%
b.11.00%
c.12.10%
d.13.00%
The weighted average cost of capital is derived after taking into consideration the weightings, for each finance source. Therefore WACC = 13% (5/25) + 12% (7/25) + 8% (13/25).
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