Neco 2017 Commerce Question 20
Practice objective / multiple choice question 20 from the 2017 Neco Commerce examination.
A firm needs \(\text{₦}500,000\) for a 3‑year project. It can obtain the amount either by a bank loan at 12\% simple interest per annum or by issuing shares at \(\text{₦}40\) each, paying an annual dividend of 8\% on the total share capital raised. Which source of finance will cost the firm less over the 3‑year period, and what is the difference in total cost between the two sources?
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About This Question
This is Neco 2017 Commerce Question 20. It is one of the objective questions from the 2017 Neco Commerce examination.
Difficulty level: Medium .
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