Neco Model Questions Vol1 2022 Commerce Question 8
Practice objective / multiple choice question 8 from the 2022 Neco Model Questions Vol1 Commerce examination.
A business needs to raise \(5{,}000{,}000\) naira. It can obtain finance from three sources: a bank loan at 12% p.a. (maximum 40% of total), equity at 18% p.a. (at least \(1{,}000{,}000\) naira must be raised this way), and a bond issue at 10% p.a. (maximum \(2{,}000{,}000\) naira). What mix of the three sources minimises the weighted average cost of capital, and what is that minimum average cost (expressed as a percentage)?
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About This Question
This is Neco Model Questions Vol1 2022 Commerce Question 8. It is one of the objective questions from the 2022 Neco Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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