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Darrell Motorsports has a new project that will require the company to borrow $5,000,000. Darrell has made an agreement with three lenders for the needed
Darrell Motorsports has a new project that will require the company to borrow $5,000,000. Darrell has made an agreement with three lenders for the needed financing. Citizens' Bank will give $2,500,000 and wants 9% interest on the loan. Visitors' Bank will give $2,000,000 and wants 13% interest on the loan. Peoples' Bank will give $500,000 and wants 16% interest on the loan. What is the weighted average cost of capital for this $5,000,000?
10.45% | ||
11.3% | ||
11.67% | ||
12.26% |
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