A person wahted to start a borrowing money from 3 c 30% equity from bank with interest rat 30% equity from a firm wit of 20% ner

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A person wanted to start a business by
borrowing money from 3 different institutes,
30% equity
from bank with interest rate of 15% per year,
30% equity from a firm with the interest rate
of 20% per
year and rest of the 40% from the
shareholders with the expected rate of return
of 20% per year. Find
the weighted average cost of capital.
Transcribed Image Text:A person wanted to start a business by borrowing money from 3 different institutes, 30% equity from bank with interest rate of 15% per year, 30% equity from a firm with the interest rate of 20% per year and rest of the 40% from the shareholders with the expected rate of return of 20% per year. Find the weighted average cost of capital.
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