A company has a financial structure where equity is 60% of its total debt plus equity. Its cost of equity is 10% and gross loan interest is 9%.…

CA Intermediate · Financial Management and Strategic Management · MTP · January 2026
A company has a financial structure where equity is 60% of its total debt plus equity. Its cost of equity is 10% and gross loan interest is 9%. Corporation tax is paid at 30%. What is the company's weighted average cost of capital (WACC)?
(A) 7.55%
(B) 7.80%
(C) 8.52%
(D) 8.05%

Suggested Answer and Working Notes:

Correct Answer: Option (C)

8.52%

Topics: Part-A: Financial Management

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