Sam Jones has an engineering firm. He wants to build a new headquarters building. The building will cost $1,500,000. He will put down $1,050,000 and have a bank finance the remainder at prime plus 2 percent. The prime lending rate is currently 8.5 percent. Sam will withdraw the money for the down payment from his mutual fund account where he has earned 13 percent for the last ten years. What is Sam's weighted average cost of capital?

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The Answer of Sam Jones has an engineering firm. He wants to build a new headquarters building. The building will cost $1,500,000. He will put down $1,050,000 and have a bank finance the remainder at prime plus 2 percent. The prime lending rate is currently 8.5 percent. Sam will withdraw the money for the down payment from his mutual fund account where he has earned 13 percent for the last ten years. What is Sam's weighted average cost of capital?

Sam Jones Has an Engineering Firm