Question 8 (10 marks) You have been provided with the following information on C-B P/L which has the following on its books; Book value Market value Cost of Capital (After-tax cost) Long-term debt $ 750,000 $780,000 6.8% Ordinary equity $ 450,000 $600,000 8.4% Preference capital $ 300,000 $400,000 7.1% a) What is the WACC % (using the BV weights)? (4 marks) b) What is the cost of capital and what is the role that it plays in making long-term investment decisions? (4 marks) c) Why is the cost of equity higher than long or short-term debt? (2 marks)

Why Choose Us

  • 100% non-plagiarized Papers
  • 24/7 /365 Service Available
  • Affordable Prices
  • Any Paper, Urgency, and Subject
  • Will complete your papers in 6 hours
  • On-time Delivery
  • Money-back and Privacy guarantees
  • Unlimited Amendments upon request
  • Satisfaction guarantee

How it Works

  • Click on the “Place Order” tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
  • Fill in your paper’s requirements in the "PAPER DETAILS" section.
  • Fill in your paper’s academic level, deadline, and the required number of pages from the drop-down menus.
  • Click “CREATE ACCOUNT & SIGN IN” to enter your registration details and get an account with us for record-keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
  • From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.