ICS plans to expand their operations as stated in Problem 5 - and are considering taking the loan - however, they have a few investors that are interested in lending money for this venture.
They need a total of $775,000, and if they lend the money today, ICS will repay it, with interest, at the end of the year.
Company A agrees to lend $300,000 and they require 5% interest, Company B will lend $200,000 at 6% interest, and Company C will loan the balance but they won't settle for less than 10% interest.
What is the weighted average cost of this capital (WACC)?