Suppose that Delta Industries has a cost of equity of 14% and a
pre-tax cost of debt of 9%. If the target debt/equity ratio is 3/4,
and the tax rate is 34%, what is Delta's weighted average cost of
capital (WACC)?
Please show all work.

Pheifer --

The debt-equity ratio is:
75% debt
25% equity

Cost of equity = 14%; the weighted average is .25 * 14% = 3.5%

Cost of debt = 9% -- but after taxes it's only 66% of that = .66 * 9% = 5.94%.
Debt is 75% of the mix, so the weighted average is .75 * 5.94% = 4.46%

Add the two weights together to get 100% of capital = 3.5% + 4.46% = 7.96%

The following Google search strategy finds several definitions:
"weight average cost of capital"

This one's pretty concise:
Investopedia.com
WACC (undated)
http://www.investopedia.com/terms/w/wacc.asp

Best regards,

Omnivorous-GA

Omnivorous-

Your answer is wrong.  The WACC formula uses weights to total
capitalization, meaning Debt / (Debt + Equity), not the debt to equity
ratio.  If the company was financed with 75% Debt as you've assumed,
the debt to equity ratio would be 3, not 3/4 as pheifer suggested. 
The correct weights should be 3/7 debt and 4/7 equity.

Ke = 14% * 4/7 = 8.00%
Kd = 9% * (1 - 34%) * 3/7 = 2.55%

WACC = Ke + Kd = 10.55%

Cheers,

T