Kooche Company plans to invest ($ 1,000,000) in projects next year. Of that, ($ 700,000) will be

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Kooche Company plans to invest \(\$ 1,000,000\) in projects next year. Of that, \(\$ 700,000\) will be provided through debt capital with a before-tax cost of 7.3 percent. The remaining \(\$ 300,000\) will be provided through equity capital at a cost of 6.5 percent. Kooche's corporate tax rate is 40 percent. What is the weighted average cost of capital?

a. 5.02 percent

b. 6.50 percent

c. 7.06 percent

d. 13.80 percent

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Principles Of Engineering Economic Analysis

ISBN: 9781118163832

6th Edition

Authors: John A. White, Kenneth E. Case, David B. Pratt

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