Waec Model Questions Vol1 2023 Commerce Question 4
Practice objective / multiple choice question 4 from the 2023 Waec Model Questions Vol1 Commerce examination.
A firm finances its operations through three sources: equity, a long‑term loan, and a short‑term loan. The cost of equity is 12 %. The nominal cost of the long‑term loan is 8 % and the short‑term loan is 10 %. The corporate tax rate is 30 %. The target capital structure is 40 % equity, 35 % long‑term loan and the remainder short‑term loan. Compute the weighted average cost of capital (WACC) for the firm (expressed as a percentage to two decimal places).
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This is Waec Model Questions Vol1 2023 Commerce Question 4. It is one of the objective questions from the 2023 Waec Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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