Compute the July 2014 cost of capital (rounded to nearest percent)for an investment center with the following information:
A)5 percent
B)53 percent
C)10 percent
D)61 percent

Question

Compute the July 2014 cost of capital (rounded to nearest percent)for an investment center with the following information: 
A)5 percent 
B)53 percent 
C)10 percent 
D)61 percent

Quizplus · Accepted Answer

The cost of capital is calculated by taking the weighted average of the costs of debt and equity for a company. The information provided does not include the weights of debt and equity or any other information about the company, so we cannot calculate the cost of capital. Therefore, the only option is to select C or choose "Cannot be determined" as the answer.

Compute the July 2014 Cost of Capital (Rounded to Nearest