Question
Springfield Corporation has two sources of funds: long-term debt with a market value of $8,000,000 and an interest rate of 8% and equity capital with
Springfield Corporation has two sources of funds: long-term debt with a market value of $8,000,000 and an interest rate of 8% and equity capital with a market value of $12,000,000 and a cost of equity of 12%. Springfields cost of debt is:
a. 0.0720 b. 0.0640
c. 0.0800 d. 0.1040
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Accounting Tools For Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
6th Edition
111919167X, 9781119191674
