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What is the company weighted average cost of capital

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Reference no: EM132980017

QUESTION - SteelCo Limited has the following capital structure: 

Capital structure Details MarketPrice

Equity 2 500 0000 R2 ordinary shares R2,5

Preference Shares 1 500 000 12% R1 preference shares R1,2

Reserves R2 500 000 NA

Bank loan R300 000 15% NA

Debentures R1 250 000 16% R150 (issued at R100)

The current and expected future rate of ordinary share dividend is 25%. Assume a tax rate of 30%.

Required - What is the company's weighted average cost of capital?

Reference no: EM132980017

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