# How to calculate the after tax WACC

So i have this question:

Assume the following data for U&P Company: Debt (D) = $$100 million; Equity (E) =$$300 million; rD = 6%; rE = 12%; and TC = 30%. Calculate the after-tax weighted average cost of capital (WACC):

I know that the formula is indeed

After tax WACC=(1-TC)rD(D/V) + rE(E/V).

If i correctly replace all the numbers i get that the after tax wacc is 6%. For example, in order to get D/V i do 100/130 since V=E+D=130.

However on the answer sheet it states that :

After tax WACC= (1/4)(1 - 0.3)(6) + (3/4)(12) = 10.05%.

I do not understand this answer; where is the (1/4) and the (3/4) coming from ? Shouldn't D/V=100/130 and E/V=30/130?

Thanks for the help!

$$V=E+D=300+100=400$$
$$\frac{E}{V}=\frac{3}{4}$$ and
$$\frac{D}{V}=\frac{1}{4}$$
You probably overlooked one zero and thought equity was 30, but in your question you yourself state that $$E=300$$.