A) Describe how a company can finance itself through equity capital and the process of doing so as well as the options the firm has in this process.

B)

A company is financed as follows:
Equity		500.00
Debt ( interest bearing)		1,500.00
Total Equity & Debt)		2,000.00
Shareholders require a return of 15% and the interest on debt is 5%.
Calculate weighted average cost of capital. (3 points)
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Equity		500.00	25%
Debt ( interest bearing)		1,500.00	75%
Total Equity & Debt)		2,000.00
WACC= 25% * 15% + 75%*5%= 7,5%