The market value of DRK Inc.'s debt is $200 million and the total
market value of the firm is $600 million. The cost of equity is 15%,
the cost of debt is 8%, and the tax rate is 34%. What is the firm's
Weighted average cost of capital (WACC)?

Pheifer --

Debt = $200M = 25%
Equity = $600M = 75%

Weighted contribution of equity = .75 * 15% = 11.25%

Cost of debt has to be reduced for the taxes credited = (1-.34) * 8% = 5.28%
Debt is only 25% of this equity structure, so the weighted contribution of debt is:
5.28% * .25 = 1.32%

Add the two weighted contributions together to get 100%: 11.25% + 1.32% = 12.57%

Google search strategy:
"weight average cost of capital"

Again, you can use this one:
Investopedia.com
WACC (undated)
http://www.investopedia.com/terms/w/wacc.asp

Best regards,

Omnivorous-GA