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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 2 years ago
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