What is the firms cost of capital


Problem

A small engineering firm has borrowed $125,000 at 8%. The partners have invested another $75,000. If the partners require a 12% rate of return, what is the firm's cost of capital: (a) Before taxes? (b) After taxes with a tax rate of 30%?

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Microeconomics: What is the firms cost of capital
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