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Home Q & A Board Other Fields Homework Help Business Accounting
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LiChan LiChan
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7 years ago
The Kit Company needs to determine a rate of return to use for its cost of capital. The interest bearing debt is $250,000 at 5%, $740,000 at 6.75%, $110,000 at 7.25% and total stockholders' equity is $1,650,000. It was determined that the cost of equity financing is 18%.

REQUIRED:
1.   What proportion of Kits total financing comes from debt?
2.   What proportion of Kits total financing comes from equity?
3.   Calculate Kits blended cost of capital rate.
Textbook 
Survey of Accounting: Making Sense of Business

Survey of Accounting: Making Sense of Business


Edition: 1st
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mourningbirdmourningbird
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7 years ago
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LiChan Author
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7 years ago
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7 years ago
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