Wacc based on the current capital structure

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XYZ limited has the following capital structure equity share (200,000 share) Rs. 4,000,000

6% preference share (face value) 1000) Rs.1,000,000

8% Debenture (face value 1000) Rs. 8,000,000

The market price of the company's equity share is Rs.20. It is expectable that the company will pay a dividend of Rs.2 per share at the end of current year which is excepted to grow at 7% forever. the tax rate may be presumed at 50%. You are required to compute the following;

WACC based on the current capital structure

WACC if the growth rate is increased to 10%

Reference no: EM132758874

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