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Determine weighted cost of capital

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Determine Weighted Cost of Capital (WACC) using market value as well book value using following data(2.28)

Book Value of Capital Structure

USD

Debentures ($1000 each)

1,600,000

Preference Share Capital( $10 each)

400,000

Equity Share Capital ($100 each)

2,000,000

4,000,000

Market Price

Debentures-$1,100 each

Preference Shares -$12 each

Equity Shares - $200

Debentures carry 8% Interest. Issued at par, Redeemable at maturity period of 20 years at par. Floatation cost 5%. Equity Dividend expected at the end of the year $20 per share. Anticipated growth rate in dividends 5%

Reference no: EM132643849

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