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MCD2170 Foundations of Finance - Trimester 3 - 2025
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Question textRio Tinto has $300 million in the capital, of which shareholders contribute 40%. Shareholders' required rate of return is 11% p.a. Creditors charge 6% p.a. interest. Rio Tinto's Weighted Average Cost of Capital is Answer 1 Question 6[input]% (round to 2 d.p)
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First, identify the components of capital and their weights in the firm’s capital structure: equity contributes 40% and debt contributes 60% of the total capital (since shareholders contribute 40% of $300 million......Login to view full explanationLog in for full answers
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