Compute the average cost of capital by using market value as weights from the following information: Net Operating Income ₹2,00,000, Total Investment ₹10,00,000, if the firm uses 5% debenture of ₹4,00,000 and equity capi

CS Executive · Financial and Strategic Management · PYQS · December 2020
Compute the average cost of capital by using market value as weights from the following information: Net Operating Income ₹2,00,000, Total Investment ₹10,00,000, if the firm uses 5% debenture of ₹4,00,000 and equity capitalization rate is 11%.
(A) 20%
(B) 9.9%
(C) 9.82%
(D) 11%

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Financial Management

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