Question: Please be so kind to answer the below question and show all calculations: Question 1: A company has financed 45% of its assets through a
Please be so kind to answer the below question and show all calculations:
Question 1:
A company has financed 45% of its assets through a 11% after-tax cost of debt loan. The remainder of its assets are financed through equity. The firms required return on equity is 16%. What is the company's weighted average cost of capital (WACC)?
A. 11.25%
C. 28.50
B. 13.75%
D. 43.56%
| Customer care Limited has determined its optimal capital structure, which comprises the following: | ||||
| Form of capital | Weight | After-tax cost | ||
| Long-term debt | 40% | 6% | ||
| Preference shares | 20% | 10% | ||
| Ordinary shares | 40% | 9% | ||
| The weighted average cost of capital is ... | ||||
| A. 5.3%. | ||||
| B. 6.2%. | ||||
| C. 8.0%. | ||||
| D. 9.1%. |
Thank you
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