hi, the code reading mentioned about the gross cost of the debt, but I am not too sure about what it actually mean. I have 2 questions (1) Suppose I borrow £100 at time 0 and repay it by a lump sum of £110.25 at time 2. What is the gross cost of debt? = ( 110.25 / 100 ) ^ 0.5 - 1 = 5% ? (2) Since the capital to finance a project is just that £100 borrowed, is the weighted cost of capital = 5%?
