(Solution) - Zapata Enterprises is financed by two sources of funds bonds -(2025 Original AI-Free Solution)

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Zapata Enterprises is financed by two sources of funds: bonds and common stock. The cost of capital for funds provided by bonds is ki, and ke is the cost of capital for equity funds. The capital structure consists of B dollars' worth of bonds and S dollars' worth of stock, where the amounts represent market values. Compute the overall weighted average of cost of capital, k0.