# Finance Learning exp.2

Anonymous
account_balance_wallet \$5

Question description

 Sources Amounts Trade and other payables \$200,000 Short-term borrowings 250,000 Mortgage 500,000 Long-term borrowings 250,000 Share capital 300,000 Retained earnings 800,000

The before-tax bank charges are 11.0% for the short-term borrowings, 10.0% for the long-term borrowings, and 10.5% on the mortgage. The shareholders expect to earn 16%. Assume that the company’s income tax rate is 50%.

Questions

1.  Calculate the company’s after-tax cost of borrowing rounded to the nearest tenth of a percent.

2.  Calculate the company’s weighted average cost of capital rounded to the nearest tenth of a percent.

University of Virginia

flag Report DMCA
Review

Anonymous
Wow this is really good.... didn't expect it. Sweet!!!!

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors