To finance a new project costing $30 million, a company borrowed $21 million at 16% per year

Question:

To finance a new project costing $30 million, a company borrowed $21 million at 16% per year interest and used retained earnings valued at 12% per year for the remainder of the investment. The company's weighted average for the project was closest to:
(a) 12.5%
(b) 13.6%
(c) 14.8%
(d) 15.6%

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...