Compute tesla ltd weighted average cost of capital

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Problem 1: Tesla Ltd. has 1 million ordinary shares outstanding with a current price of $423.5 per share. The Beta of the ordinary share is 3, the market risk premium is 4.25% and the risk-free rate is 2.5%. Tesla Ltd. has also 2 million preference shares outstanding that pay an annual dividend of $5. The current market price of Tesla Ltd. preference share is $65. Altex Ltd. has a 30% corporate tax rate. Compute Tesla Ltd's weighted average cost of capital (WACC).

Reference no: EM133007005

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