Answer:
Step-by-step explanation:
100 +30+2+.60 or .6
A(n) = 2 + 9(n - 1) = 2 + 9n - 9
A(n + 1) = 2 + 9(n + 1 - 1) = 2 + 9n = (2 + 9n - 9) + 9 = A(n) + 9
Therefore, the recursive formular is A(n) = A(n - 1) + 9
If the cost of equity is 12% , cost of debt 10%, tax rate 25%, 20 million market value of debt , 60 million market value of equity then the weighted average cost of capital is 10.875%
Given cost of equity is 12% , cost of debt 10%, tax rate 25%, 20 million market value of debt , 60 million market value of equity.
We know that weighted average cost of capital= cost of equity* weight of equity+ cost of debt* weight of debt.
Cost of debt (consider after tax)=10%(1-25%)
=10%*0.75
=0.075
Weight of equity=60/80
=0.75
Weight of debt=20/80
=0.25
Weighted average cost of capital=12%*0.75+0.075*0.25
=0.09+0.01875
=0.10875
=10.875%
Hence the weighted average cost of capital is 10.875%
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