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What is the weighted average cost of this capital

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Reference no: EM131312299

ICS Manufacturing Company produces plastic parts for the automotive industry. Here is their Income Statement for 2015

                                    Sales Revenue                                      $35,500,000

                                    Cost of Goods Sold                              12,725,000

                                    Selling, General & Admin Exp                11,200,000

                                    Depreciation Expense                               3,200,000

                                    EBIT                                                         8,375,000

                                    Interest Expense                                          350,000

                                    Taxable Income                                       8,025,000

                                    Taxes                                                       3,210,000

                                    Net Income                                               4,815,000

ICS needs a total of $775,000, and if they lend the money today, ICS will repay it, with interest, at the end of the year. Company A agrees to lend $300,000 and they require 5% interest, Company B will lend $200,000 at 6% interest, and Company C will loan the balance but they won’t settle for less than 10% interest. What is the weighted average cost of this capital (WACC)?

Reference no: EM131312299

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