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Exam F2 All Questions
Exam F2 All Questions

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CIMA Management F2 Question # 34 Topic 4 Discussion

F2 Exam Topic 4 Question 34 Discussion:
Question #: 34
Topic #: 4

XY has a weighted average cost of capital (WACC) of 12%. The debt:equity ratio is 1:3 and this is considered low for the industry. XY needs to raise finance to purchase new machinery in the coming year.

Which of the following forms of finance is most likely to increase the WACC?


A.

Rights issue of equity shares


B.

6% bank loan


C.

8% preference shares


D.

Finance lease


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