Compute the weighted average cost of capitol

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Reference no: EM13191779

Speedy Delivery Systems can buy a piece of equipment that is anticipated to provide an 8% return and can be financed at 5% with debt. Later in the year, the firm turns down an opportunity to buy a new machine that would yield a 15% return but would cost 17% to finance through common equity. Assume debt and common equity each represent50% of the firms capitol structure. Compute the weighted average cost of capitol.

Reference no: EM13191779

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