Calculate the weighted average cost of capital of ptl bhd

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Question - PTL Bhd has issued 5 million ordinary shares, with a market price of RM9 each. The company has RM1 million of irredeemable 13% debentures in issue, with a market price of RM85 per RM100 nominal value. It also has issued 500,000 preference shares at 15%, with a nominal value per share of RM1, and with a market value of RM1.45. The tax rate is 25% per annum. Recently, the company has recorded its current earnings of RM1.5 million, and paid dividends in the past years as below:

2016: RM0.60

2017: RM0.90

2018: RM1.00

2019: RM0.85

2020: RM0.70

Required - Using the information given above, calculate the weighted average cost of capital of PTL Bhd.

Reference no: EM133039464

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