Waec Model Questions Vol1 2024 Commerce Question 27
Practice objective / multiple choice question 27 from the 2024 Waec Model Questions Vol1 Commerce examination.
A business needs ₦5,000,000 for expansion. It can either (A) obtain a bank loan at 8% annual interest, with interest tax‑deductible at a corporate tax rate of 30%, or (B) issue 10,000 ordinary shares with a nominal value of ₦500 each, paying a 12% dividend on the nominal value (dividends are not tax‑deductible). Which financing option results in a lower after‑tax cost for the year, and what is that cost?
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This is Waec Model Questions Vol1 2024 Commerce Question 27. It is one of the objective questions from the 2024 Waec Model Questions Vol1 Commerce examination.
Difficulty level: Medium .
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