Question: I keep getting 0.3 when instead I am supposed to get 0.1??? Suppose that a company has total financing where 10% comes from bonds, 10%
I keep getting 0.3 when instead I am supposed to get 0.1???
Suppose that a company has total financing where 10% comes from bonds, 10% from a loan, and 80% from shareholders' equity. The bonds pay on average a 10% interest rate, the loan has a 10% interest rate, and shareholders require a 10% return. What is the weighted average cost of capital (WACC) equal to?
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