Aberforth Dumbledore Corporation began construction of a tavern on March 31, 2021. The project was completed...

Aberforth Dumbledore Corporation began construction of a tavern on March 31, 2021. The project was completed on April 30, 2022. No new loans were required to fund construction. Aberforth Dumbledore had the following debts that were outstanding throughout the construction period: $4,700,000, 6% note $21,180,000, 9% bonds Construction expenditures incurred were as follows: March 31, 2021 $ 4,630,000 June 30, 2021 6,630,000 November 30, 2021 1,926,000 February 28, 2022 3,630,000 What is Aberforth Dumbledore Corporation's weighted average cost of debt?

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Expert Solution

	Amount	Multiply: Rate	Interest
Note	4,700,000	6%	282,000
Bonds	21,180,000	9%	1,906,200
Total	25,880,000		2,188,200

	Total interest		2,188,200
Divided by:	Total debt		25,880,000
	Weighted average cost of debt		8.45518%
	Weighted average cost of debt (Rounded)		8.46%

ekkarill92 answered 1 year ago

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