Question: Supply Co. has a project that will require the company to borrow $1,000,000. Supply Co. has made an agreement with three lenders for the financing.

Supply Co. has a project that will require the company to borrow $1,000,000. Supply Co. has made an agreement with three lenders for the financing. First National Bank will give $500,000 and wants 8.0% interest. Lockup Bank will give $300,000 and wants 12.0% interest. Southern Bank will give $200,000 and wants 13.0%interest. What is the weighted average cost of the capital for this $1,000,000 loan?

15.9% 8.2% 19.9% 10.2% 12.8%

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