Gce Model Questions Vol1 2021 Commerce Question 17
Practice objective / multiple choice question 17 from the 2021 Gce Model Questions Vol1 Commerce examination.
A company's current capital structure is 40% equity (cost \(12\%\)), 30% retained earnings (cost \(9\%\)) and 30% long‑term loan (cost \(8\%\)). The total capital is \(\text{₦}50{,}000{,}000\). The firm plans to raise an additional \(\text{₦}5{,}000{,}000\) by issuing new debentures at \(10\%\) interest, which will replace an equal amount of the existing long‑term loan. After this change, what is the new weighted average cost of capital (WACC)?
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About This Question
This is Gce Model Questions Vol1 2021 Commerce Question 17. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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