In an effort to increase its customer base, a company set the project MARR at exactly the WACC. If equity capital costs 9% per year and debt capital costs 11% for the project, what is the equity-debt percentage mix of capital required to make the WACC = 10%? The mix is __ % equity and __ % debt capital.

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Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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In an effort to increase its customer base, a company set the project MARR at exactly the WACC. If equity capital costs 9% per year and debt capital costs 11% for the project, what is the equity-debt percentage mix of capital required to make the WACC = 10%?

The mix is __ % equity and __ % debt capital.

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WACC (weighted average cost of capital) refers to the average cost that is paid by a company to raise the fund for the company’s business operations.

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