the second photo is an example if it helps I need a, b, and c, thank you d 43243
ID: 2795025 • Letter: T
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the second photo is an example if it helps
I need a, b, and c, thank you
d 43243030 & questionid 1 & flushed talsesa 45213 entere - 5s :/ ecure https://www.mathx.com Student Player omework.aspx homework izek Business Finance Ramcy Rizek 12/1/1 7 9: 14 PM neln Homework: Chapter 16 Homework Save ying Hw Score: 40.74%, 3.67 of 9 pts nScore: 0 of 1 pt of 5019(5 complete) Question Help * tosh HD - (similar to) com Pecking order hypothesis. Rachel can raise capital from the sources in the popup window: E What is Rachel's weighted average cost of capital if she needs to raise a. $15,000? c. $35,000? tooth ected b. $25,000? a. What is Rachel's weighted average cost of capital if she needs to raise $15,000? paym ity of yoff 01)% (Round to two decimal places.) Parents Friends Bank loan Credit card Interent 0% 5% 12% 15% $12,000 S 3,000 $17,000 6.000 ofit $3 ould no Enter your answer in the answer box and Print Done cours Finance) is based orn oreExplanation / Answer
P -16- 7
a.
if he need $15,000 then he raise capital Worth $12,000 from Parents at 0% rate and $3,000 from frined at 5%.
Annual Cost = ($12,000 × 0%) + ($3,000 × 5%)
= $0 + $150
= $150.
Annual Dollar cost of financing is $150.
WACC = $150 / $15,000
= 1%.
WACC of financing $15,000 is 1%.
b.
if he need $25,000 then he raise capital Worth $12,000 from Parents at 0% rate, $3,000 from frined at 5% and 10,000 from Bank at 12%.
Annual Cost = ($12,000 × 0%) + ($3,000 × 5%) + ($10,000 × 12%)
= $0 + $150 + $1,200
= $1,350
Annual Dollar cost of financing is $1,350.
WACC = $1,350 / $25,000
= 5.40%.
WACC of financing $25,000 is 5.40%.
c.
if he need $35,000 then he raise capital Worth $12,000 from Parents at 0% rate, $3,000 from frined at 5%, 17,000 from Bank at 12% and $3,000 from credit card.
Annual Cost = ($12,000 × 0%) + ($3,000 × 5%) + ($17,000 × 12%) + ($3,000 × 15%)
= $0 + $150 + $2,040 + $450
= $2,640
Annual Dollar cost of financing is $2,640
WACC = $2,640 / $35,000
= 7.54%.
WACC of financing $35,000 is 7.54%.
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