Neco 2025 Commerce Question 31
Practice objective / multiple choice question 31 from the 2025 Neco Commerce examination.
A small business needs to raise \(\text{₦}5,000,000\). It can obtain finance from three sources: a bank loan at \(12\%\) per annum, issuing new shares at a cost of equity of \(18\%\), and retained earnings at a cost of \(10\%\). The firm must keep the proportion of debt (bank loan) at most \(40\%\) of total finance and the proportion of equity (shares) at least \(30\%\) of total finance. Determine the minimum possible weighted average cost of capital (WACC) and state the amount to be raised from each source that achieves this minimum.
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About This Question
This is Neco 2025 Commerce Question 31. It is one of the objective questions from the 2025 Neco Commerce examination.
Difficulty level: Medium .
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