Calculate ellerines furniture retained earnings

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Ellerines Furniture produces office furniture. It has EBIT of R2,5 million; a tax rate of 28%; debentures outstanding of R1.6 million, a before-tax cost of debt ( kd) of 10%; cost of equity (ks ) of 12%; and 450 000 ordinary shares issued with a book value of R11,00 per share. Ellerines Furniture's dividend pay-out ratio is 30% and it expects a growth rate of 7%.

REQUIRED:

Calculate Ellerines Furniture's retained earnings, dividend per share, share price and weighted average cost of capital.

Reference no: EM132623167

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