Part b: For the following capital structure of a firm and before-tax costs of different sources of finance, compute the weighted average cost of funds (WACC). Financing Amount (Rs.) Proportion (in %) Before-tax.cost source (in %) Long-term Debt 4,000,000 20 Preferred equity 2,000,000 10 Common (stock) 6,000,000 30 6 9 12 equity Retained 8,000,000 40 11 Earnings Total 20.000.000 100% Applicable tax rate is 30%. |