Calculate the after-tax WACC for a firm with a 25 percent tax rate, a 10 percent cost of debt, a 30 percent cost of equity, and a target debt to value of 0.30. Explain how investing to provide the WACC returns keeps the debt and equity investors happy.

We will call D1 and D2 the volume of dextrose at 2.5% and 30% respectively

D1 + D2 = 500 (1)

D1*2,5/100 + D2*30/100 = 500*10/100 (2)

(2,5D1+30D2)/100 = 50

2,5D1 +30D2 = 50*100 = 5.000 (2)

D1 = 500 - D2 Now we clear D1 in (1)

2,5(500-D2) + 30D2 = 5.000 and we substitute in (2)

1.250 - 2,5D2 + 30D2 = 5.000

27,5D2 = 5.000 - 1.250 = 3.750

D2 = 3.750/27,5 = 136ml +4/11ml

D1 = 500ml - 136ml +4/11ml

D1 = 363ml +7/11ml

ANSWER 363ml+7/11 ml of dextrose 2,5% and 136ml+4/11 ml dextrose 30%