User Account

All Pages

What is twc ltd cost of preference shares

Assignment Help Finance Basics
Reference no: EM132682226

The following information relates to Trump Wall Constructions Ltd (referred to as "TWC Ltd"):

  • TWC Ltd has 30,000 bonds outstanding with a face value and price of $1000 each, which have 10 years to maturity and pay an-annual 5% coupon. The yield on the bonds is 6% p.a. TWC Ltd's marginal corporate tax rate is 30%.
  • TWC Ltd has 5 million preference shares on issue, which are currently trading for $5.00 each, giving a total market value of $25 million. They pay an annual dividend of 80 cents.
  • TWC Ltd has 10 million ordinary shares on issue, which are currently trading for $6.00 each, giving a total market value of $60 million. The beta of these shares is 1.2, the risk-free rate of return is 3% and the market risk premium is 6%.

Part A, B and C

Answer the following questions in the space provided below:

a. What is TWC Ltd's cost of preference shares?

b. What is TWC Ltd's cost of ordinary shares?

c. What is TWC Ltd's weighted average cost of capital (WACC)?

Reference no: EM132682226

Questions Cloud

What is the average daily float-mr smith : Mr. Smith receives a monthly income of $3,500 from his pension plan. It takes two days for the cheque to be mailed to him
How will you rearrange the items to dedicate enough time : How will you rearrange these items to dedicate enough time to your schoolwork? What changes do you want to make? What professional resources are available.
Determine the amount of depletion expense for current year : Ashwood Mining Co. acquired mineral rights for $15,000,000. Determine the amount of depletion expense for the current year
Compare the objective probabilities with the risk-neutral : Compare the objective probabilities (i.e. 50% up or down) with the risk-neutral probabilities found in (a). Are they the same or different? Why?
What is twc ltd cost of preference shares : The following information relates to Trump Wall Constructions Ltd (referred to as "TWC Ltd"):
What are characteristics of a human becoming nurse : What are characteristics of a human becoming nurse? What are strengths and weaknesses to this theory of nursing? What challenges exist for healthcare.
Adam And Eve : Why Mitochondrial Eve should have been expected, and why the discovery of a Y-chromosome Adam was inevitable.
What was the book value of the equipment on January : Equipment acquired on January 4, 2009, at a cost of $425,000, What was the book value of the equipment on January 1, 2012
Why summary information in the income statement : Some financial statement users criticize the timeliness of annual financial statements.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd