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    Question

    A company has Rs. 20,00,000 equity (Ke = 15%) and Rs.

    10,00,000 debt (Kd = 10% post-tax). Calculate Weighted Average Cost of Capital (WACC).
    A 12.5% Correct Answer Incorrect Answer
    B 13.3% Correct Answer Incorrect Answer
    C 14.0% Correct Answer Incorrect Answer
    D 11.7% Correct Answer Incorrect Answer
    E 15.0% Correct Answer Incorrect Answer

    Solution

    Total = 30,00,000. Weights: Equity = 20/30 = 0.667, Debt = 10/30 = 0.333. WACC = (0.667×15) + (0.333×10) = 10 + 3.3 = 13.3%.

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