Weighted Average Cost of Capital

The WACC formula:

Cost of Debt * % of Debt + Cost of Equity * % of Equity

Now the weights in this case:

If my Debt is Rs. 300 and my Equity is Rs. 100, my total capital employed will be Rs. 400

Now weight of Debt - 300/400 = 75%

and Weight of Equity = 100/400 = 25%

Hope it answers your query !!

MULTIPLY THE COST OF A PARTICULAR COMPONENT OF CAPITAL STRUCTURE WITH ITS SHARE PROPORTION IN THE TOTAL VALUE OF THE CAPITAL STRUCTURE.................

FOR THE PURPOSES OF CALCULATING THE SHARE PROPORTION, MARKET VALUES CAN PROVIDE THE BETTER OPTION............

wow thankq soo much ....  Vinay and Ashish