Answer:
12.75 %
Explanation:
Cost of Capital is calculated on a Weighted Average basis. This is because there is a Pooling of Funds when it comes to financing projects. So Cost of Capital is the Return that is Required by providers of Long Term source of finance.
Cost of Capital = E/V × Ke + D/V × Kd
Where,
E/V = Market Weight of Equity
= 0.55
Ke = Cost of Equity
= 15%
D/E = Market Weight of Debt
= 0.45
Kd = Cost of Debt
= 10%
Therefore,
Cost of Capital = 0.55 × 15% + 0.45 × 10%
= 12.75 %
It could be caused by inflation. inflation is when currency value is low, making some tings more expensive.
It is true that operating activities are the primary sources of revenue and expenses.
<h3>What is operating activities?</h3>
Operating activities are the primary source of revenues and expenses of a business which ultimately determine whether a company make profit or incurs loss. The amounts a business charges its customers when it provides goods or service is referred to operating activities.
Operating activities involve those activities a business engages for the purpose of making profit.
Operating activities includes:
- Investing activities
- Financing activities
Hence, operating activities are truly the primary sources of revenue and expenses.
Learn more about operating activities here : brainly.com/question/25716101
