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Calculate the weighted average cost of capital to risa

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Question - Risa is interested in expanding her baking business but needs funding to support it. She has chosen to obtain funds from various loans. Risa will borrow $2,000 from her best friend Johnny, who will charge her 8% on the loan. She will obtain $5,000 from her credit union, who will charge her 12% per annum. Finally, she will obtain $3,000 from her parents who will charge her 5% per annum on the loan. Calculate the weighted average cost of capital to Risa.

a. 63.1 percent

b. 8.33 percent

c. 9.1 percent

d. 25 percent

Reference no: EM133096311

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