2B4B AN ACCOUNTANT FOR STABILITY INC. MUST CALCULATE THE WEIGHTED AVE...
129.
CSO: 2B4a
LOS: 2B4b
An accountant for Stability Inc. must calculate the weighted average cost of capital of the
corporation using the following information.
Interest Rate
Accounts payable
$35,000,000
-0-
Long-term debt
10,000,000
8%
Common stock
10,000,000
15%
Retained earnings
5,000,000
18%
What is the weighted average cost of capital of Stability?
a.
6.88%.
b.
8.00%.
c.
10.25%.
d.
12.80%.