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Math Help - equation rearrange

  1. #1
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    equation rearrange

    please help me

    wacc=16% kd is 40%,ke is 60% ,t is 30%
    required keu?
    formula wacc=keu(keu-kd)(1-t)kd/ke.
    answer is 14.1% but i dunt know how to calculate it...
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  2. #2
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    Quote Originally Posted by bozi View Post
    please help me

    wacc=16% kd is 40%,ke is 60% ,t is 30%
    required keu?
    formula wacc=keu(keu-kd)(1-t)kd/ke.
    answer is 14.1% but i dunt know how to calculate it...
    I assume keu is one variable and it is not equal to ke*u?

    wacc = keu*\frac{(keu-kd)(1-t)(kd)}{ke}

    Fill in what you know...

    0.16 = keu*\frac{(keu-0.4)(1-0.3)(0.4)}{0.6}

    0.16 = keu*\frac{(keu-0.4)(0.28)}{0.6}

    \frac{0.16*0.6}{0.28} = keu*(keu-0.4)

    \frac{0.16*0.6}{0.28} = keu*(keu-0.4)

    0.3429 = keu^2 - 0.4keu

    Let x = keu

    0.3429 = x^2 - 0.4x

    x^2 - 0.4x - 0.3429 = 0

    Can you solve this quadratic for x?
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  3. #3
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    Quote Originally Posted by bozi View Post
    please help me

    wacc=16% kd is 40%,ke is 60% ,t is 30%
    required keu?
    formula wacc=keu(keu-kd)(1-t)kd/ke.
    answer is 14.1% but i dunt know how to calculate it...
    Quote Originally Posted by bozi View Post
    please help me

    wacc=16% kd is 40%,ke is 60% ,t is 30%
    required keu?
    formula wacc=keu(keu-kd)(1-t)kd/ke.
    answer is 14.1% but i dunt know how to calculate it...
    0.16 = (keu(keu-0.4)(1-0.3)(0.4))/0.6

    0.096 = keu(keu-0.4)(0.28)

    12/35 = keu^2 - 0.4keu

    35keu^2 - 14keu - 12 = 0

    But I don't get 0.14 as one of the answers...
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  4. #4
    GAMMA Mathematics
    colby2152's Avatar
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    Quote Originally Posted by sean.1986 View Post
    0.16 = (keu(keu-0.4)(1-0.3)(0.4))/0.6

    0.096 = keu(keu-0.4)(0.28)

    12/35 = keu^2 - 0.4keu

    35keu^2 - 14keu - 12 = 0

    But I don't get 0.14 as one of the answers...
    Both of our equations end up being the same. Yours is simply 35 times mine. I, also, do not receive an answer of 0.141
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  5. #5
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    thank you so much, i don't know maybe i dunt knw it's correct answer.
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  6. #6
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    You should post more information about the question. Perhaps post it in full?
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  7. #7
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    it's an accounting question, which ask for cost of equity of ungeared company so it stand as keu.
    i asked many accounting quetion but nobody replies to them
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