Waec Model Questions Vol1 2020 Commerce Question 28
Practice objective / multiple choice question 28 from the 2020 Waec Model Questions Vol1 Commerce examination.
A small business needs ₦10,000,000 of finance. It can raise the amount by 40% equity at a cost of 12% per annum, 30% bank loan at 10% interest, and 30% trade credit at an effective cost of 8% (no interest but loss of cash discount). The corporate tax rate is 30%. Calculate the overall effective cost of finance (WACC) after taking the tax shield on the bank loan into account. Express your answer as a percentage to one decimal place.
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About This Question
This is Waec Model Questions Vol1 2020 Commerce Question 28. It is one of the objective questions from the 2020 Waec Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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