Question

    A company is planning a capital raise of ₹20 lakh,

    with 60% from equity (cost 16%) and 40% from debt (cost 10%). If the tax rate is 30%, calculate its post-tax Weighted Average Cost of Capital (WACC).
    A 13.2% Correct Answer Incorrect Answer
    B 14.5% Correct Answer Incorrect Answer
    C 13.6% Correct Answer Incorrect Answer
    D 12.4% Correct Answer Incorrect Answer
    E 11.0% Correct Answer Incorrect Answer

    Solution

    WACC = (0.6 × 16%) + (0.4 × 10% × 0.7) = 9.6% + 2.8% = 12.4%

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