Sources Amounts Trade and other payables $200,000 Short-term borrowings 250,000 ...
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Finance
| Sources | Amounts |
| Trade and other payables | $200,000 |
| Short-term borrowings | 250,000 |
| Mortgage | 500,000 |
| Long-term borrowings | 250,000 |
| Share capital | 300,000 |
| Retained earnings | 800,000 |
The before-tax bank charges are 11,0% for the short-term borrowings, 10,0% for the long-term borrowings, and 10.5% on the mortgage. The shareholders expect to earn 16%. Assume that the company's income tax rate is 40%.
Questions:
Calculate the company's weighted average cost of capital.
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