Question: ICS plans to expand their operations as stated in Problem 5 and are considering taking the loan however, they have a few investors that are
ICS plans to expand their operations as stated in Problem 5 and are considering taking the loan however, they have a few investors that are interested in lending money for this venture. They need a total of $775,000, and if they lend the money today, ICS will repay it, with interest, at the end of the year. Company A agrees to lend $300,000 and they require 5% interest, Company B will lend $200,000 at 6% interest, and Company C will loan the balance but they wont settle for less than 10% interest. What is the weighted average cost of this capital (WACC)?
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