Finance Learning exp.2
Sources |
Amounts OUR PROCESSOrderPaymentWritingDeliveryWhy Choose Us: Cost-efficiency, Plagiarism free, Money Back Guarantee, On-time Delivery, Total Сonfidentiality, 24/7 Support, 100% originality |
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.