Aloha company CEO wants to assess if he will approve the project by comparing the WACC and the projects rate of return Project rate of return based on proposal is 11% Aloha Co. needs to raise capital totaling P100k for the project. 42% will come from investors with an expected return of 13%. The balance of 58% will be borrowed from bank at 9% interest rate The corporate tax rate is 30%. Compute for WACC and assess if the CEO should approve the project

Answer rating: 100% (QA)

To compute the Weighted Average Cost of Capital WACC we need to consider the different sources of ca... View the full answer