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Calculate the weighted average cost of capital

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Question - The cost of capital for COVID Ltd consists of term loans, ordinary shares and preference shares. The table given below summarizes COVID Ltd's sources of financing with the respective component costs:

Source of Funds

Kx(%)

Amount of Financing ($)

Term Loans

21.00

200,000

Ordinary Shares

12.00

150,000

Preference Shares

8.00

1,000,800

Using the information contained in the table above for COVID Ltd's, calculate the weighted average cost of capital (WACC).

a. 103.7%

b. 10.37%

c. 0.10369%

d. 14.01%

Reference no: EM133055156

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