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Please be so kind to answer the below question and show all calculations: Question 1: A company has financed 45% of its assets through a
Please be so kind to answer the below question and show all calculations:
Question 1:
A company has financed 45% of its assets through a 11% after-tax cost of debt loan. The remainder of its assets are financed through equity. The firms required return on equity is 16%. What is the company's weighted average cost of capital (WACC)?
A. 11.25%
C. 28.50
B. 13.75%
D. 43.56%
Customer care Limited has determined its optimal capital structure, which comprises the following: | ||||
Form of capital | Weight | After-tax cost | ||
Long-term debt | 40% | 6% | ||
Preference shares | 20% | 10% | ||
Ordinary shares | 40% | 9% | ||
The weighted average cost of capital is ... | ||||
A. 5.3%. | ||||
B. 6.2%. | ||||
C. 8.0%. | ||||
D. 9.1%. |
Thank you
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