Special Industries is considering investing $40 million in plant expansion. Management needs to know the average cost of capital to use in evaluating this capital investment decision. The company's capital structure consists of $4,000,000 of debt at 3 percent interest and $6,000,000 of stockholders' equity at 4 percent. What is the average cost of capital of Special Industries.

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The Answer of Special Industries is considering investing $40 million in plant expansion. Management needs to know the average cost of capital to use in evaluating this capital investment decision. The company's capital structure consists of $4,000,000 of debt at 3 percent interest and $6,000,000 of stockholders' equity at 4 percent. What is the average cost of capital of Special Industries.

Special Industries Is Considering Investing $40 Million in Plant Expansion