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What is Gagah weighted average cost of capital

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Reference no: EM132995789

Question - Gagah Motors Enterprise., a producer of turbine generators, is in this situation: EBIT = RM4 million, tax rate = T = 35%, debt outstanding = D = RM2 million, rd = 10%, rs = 15%, shares of stock outstanding = No = 600,000, and book value per share = RM10. Because Gagah's product market is stable and the company expects no growth, all earnings are paid out as dividends. The debt consists of perpetual bonds.

Required -

(i) What are Gagah's earning per share (EPS) and its price per share (P0)?

(ii) What is Gagah's weighted average cost of capital (WACC)?

Reference no: EM132995789

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