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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Help on MCQ
KJG Co has a real cost of capital of 8%. Inflation is 5%. What is the nominal (money ) cost of capital?
You use the fisher formula on the formula sheet.
1 + i = 1.08 x 1.05 = 1.134
So the nominal cost of capital is 0.134 or 13.4%
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