User Account

All Pages

Calculate vendata resources component costs

Assignment Help Cost Accounting
Reference no: EM133205024

Vendata Resources seeks to invest R10 million in a new mining project in order to expand its gold production capacity. The management of the company prefers to maintain the present 35% debt, 55% equity and 10% preference shares capital structure.

Debt financing can be obtained by issuing a 5-year R1 000 bond. The current price of the bond is R1 123 and it pays 10% coupons.

Vendata Resources has a beta of 1.3. The expected return on the market portfolio is 16% and the current risk-free rate is 8%.

The company is contemplating issuing 10% preference shares that are expected to sell for a par value of R60 per share. The cost of issuing and selling the shares is expected to be 5%. The tax rate is 29%.

REQUIRED

Calculate Vendata Resources' component costs.

Calculate the company's weighted average costs of capital.

Reference no: EM133205024

Questions Cloud

Create a one-page brochure or a brief two-minute infomercial : Create a one-page brochure, or a brief one to two-minute infomercial, for people in midlife or late adulthood, targeting the enhancement optimal aging.
What will the risk of the portfolio be : The Bank of Tinytown can only approve two loans but has four loans that the credit department has identified. Given the data presented in Table 1 what are the e
Complexities encountered developing cooperative strategies : What are some of the major complexities encountered in developing cooperative strategies such as strategic alliances and joint ventures?
Difference between a price setter and a price taker : Difference between a price setter and a price taker and explain if most providers may be classified strictly as price-setters or price takers
Calculate vendata resources component costs : Vendata Resources seeks to invest R10 million in a new mining project in order to expand its gold production capacity.
What is the predictive analytic technique : What is the Predictive Analytic Technique used in the study Ozcan, Y. A. (2017). Analytics and decision support in health care operations management
Compute the yield to maturity for bond : The following table summarizes prices of various? default-free zero-coupon bonds? ($100 face? value):
What were the major findings from the study : Describe how the data was gathered and analyzed. What were the major findings from the study? Were there any limitations?
Is it appropriate that angie was fired for her facebook post : Is it appropriate that Angie was fired for her Facebook post? Why or why not? Explain the legal and ethical issues that led to your thinking.

Reviews

Write a Review

Cost Accounting Questions & Answers

  What the target sales

The unit variable cost is P40 with a selling commission of 10%. The income tax rate is 30%. What the target sales if after tax income is P123,200

  What is the formula to conduct a profit sensitivity analysis

What is the formula to conduct a profit sensitivity analysis in a multi-product company where different products carry different costs, selling prices

  What is the unit cost per finished unit of job

X Corp incurred the following cost for Job 101 for manufacture of 200 units: Direct materials of 660; What is the unit cost per finished unit of Job

  Provide correct journal entries for the labor and material

Chen Company uses a standard cost system. Provide the correct journal entries for the labor and materials cost associated with finished production this period

  Write a business report describing budgeting

Calculate the beginning balance of the Direct Materials Control account. If necessary, round to whole dollars - Create a manual/handwritten

  Define what is cost-volume-profit analysis

What is cost-volume-profit (CVP) analysis and how do companies use CVP information in decision making? Explain

  Find the net present value of the investment in machine

What is the difference between the total, undiscounted cash inflows and cash outflows over the entire life of the machine. Find the net present value

  Prepare budget for utilization of the capacity

Prepare budget for 70%, 80% and 100% utilization of the capacity if details listed above is for 100% capacity utilization

  Would you classify a realty business like ruby river

Would you classify a realty business like Ruby River as a manufacturing, merchandising, or service business and analyzing the interrelationships among the four financial statements, determine the proper amounts for (a) through (o).

  Q1the high-low method uses cost and activity data from just

q1.the high-low method uses cost and activity data from just two periods to establish a cost formula.a.

  Prepare a bank reconciliation for banner

The cash received on July 31 amounted to $16,000. It was left at the bank in the night depository chute after banking hours on July 31 and therefore was not recorded by the bank on the July statement.

  Find when go to retail stores right

Even the freshness of dairy products is maintained even if stored at room temperature. We often see this when we go to retail stores, right?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd