Calculation Of Average Weighted Costs Of Capital When Assessing Company Business Activities
Table 1:
Assumed sources of capital | Contribution to the total capital | Alternative costs | Tax rate | After tax costs | Average weighted contribution values |
1 | 2 | 3 | 4 | 5 | 2×5=6 |
Debt obligations | 16 | 8 | 18 | 26 | 4,16 |
Stocks | 84 | 12 | – | 12 | 10.1 |
Average weighted costs of capital | 14.26 |