Compute the weighted average cost of capital, Financial Management

Assignment Help:

Q. Compute the weighted average cost of capital?

A company's subsequent to tax specific cost of capital are as follows:

Cost of debt                                                                10%

Cost of Preference Shares                                           12%

Cost of Equity Shares                                                   15%

The subsequent is the capital structure:

Source                                                                         Amount

Debt                                                                            3,00,000

Preference Share Capital                                             2,00,000

Equity Share Capital                                                   5,00,000

____________

 10,00,000

____________

Compute the weighted average cost of capital, Kw

Calculation of Weighted Average Cost of Capital using Book Value Weights:-

2373_Compute the weighted average cost of capital.png

The weighted average cost utilizing book value weights is 12.9%


Related Discussions:- Compute the weighted average cost of capital

On-the-run treasury issues and selected off-the-run treasury, The wid...

The wide gap between maturities poses problems in using the on-the-run issues, especially after five years. Some dealers and vendors use selected off-the-run Trea

Issuer’s considerations, Issuer's Considerations Cash Flows: Issuers ma...

Issuer's Considerations Cash Flows: Issuers may consider the period for which the funds are required and try to spread the borrowings in a way to minimize the costs. Generally,

Price of the share as per gordon''s model, Considering the following inform...

Considering the following information, what is the price of the share as per Gordon's Model?  Details of the Company

What is adjusted basis, Q. What is Adjusted Basis? Adjusted Basis - Aft...

Q. What is Adjusted Basis? Adjusted Basis - After a taxpayer's basis in property is determined, it should be adjusted upwardto include any additions of capital to the property

Financial reporting, Financial Repor ting The process of prepar...

Financial Repor ting The process of preparing the corporation's financial statements in accordance with generally accepted accounting principles. The statements prepare

Treasury bonds or t-bonds or the long bond, Treasury bonds are the bo...

Treasury bonds are the bonds issued with maturities greater than 10 years. However, these are commonly issued with a maturity of 30 years. Like T-notes, these bon

What is debentures, Q. What is Debentures? Debentures a debenture is an...

Q. What is Debentures? Debentures a debenture is an instrument issued by the company acknowledge its debts to its holders . it is also an important method of raising long terms

Finance case study, This case has been framed in order to test the skills i...

This case has been framed in order to test the skills in evaluating a credit request and reaching a correct decision. Perluence International is large manufacturer

Types of treasury bills, Types of Treasury Bills Treasury bills are iss...

Types of Treasury Bills Treasury bills are issued at various maturities, generally up to one year. Thus, they are useful in managing short-term liquidity. At present, the GOI (

Current assets management, how is operating cycle applicable to poultrybusi...

how is operating cycle applicable to poultrybusiness in Uganda (broilers)

Write Your Message!

Captcha
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!

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