The Angel Investor

Assignment: The Angel Investor

The concept of after-tax Weighted Average Cost of Capital (WACC) is a foundation when assessing cost of capital and investment options. The Assignment will present the opportunity to assess a financing transaction and build upon your understanding of this cost of capital concept and demonstrate your ability to calculate the after-tax WACC.

The following course outcome is assessed in this Assignment:

MT480-6: Incorporate the combined attributes of debt and equity given a cost of capital model.

Read the scenario and address the checklist items.

Scenario: You are an Angel Investor who has been approached by an entrepreneur to assess an investment opportunity.

An entrepreneur asks for $100,000 to purchase a diagnostic machine for a healthcare facility. The entrepreneur hopes to maintain as much equity in the company, yet the Angel Investor requires the transaction to be financed with 60% debt and 40% equity.

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