Calculate the weighted average cost of capital

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Suppose Your Company where you work as Finance Director is Financed by both debt (bonds) and equity (shares). In the Board Meeting, it was agreed that you needed to raise extra funds for capital Expenditure (K1 Million). Since your company is listed on the Lusaka Stock Exchange, you sold 400 worth of bonds at K1,000 each at 5% coupon rate (A total of K400,000 raised). The company further issued stocks (shares)totaling 6,000 at K100 each with an expected return of 6% (cost of equity). The company therefore managed to raise the required amount of K1, 000,000 for the desired capital expenditure.

REQUIRED:

Calculate the Weighted Average Cost of Capital (WACC) for your company

Reference no: EM132529039

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