assinment, Corporate Finance

Assignment Help:
Profit for the year R3 million R4 million
Gross dividends R1.5 million R2 million
Market value per ordinary share R4 R1.60
Number of ordinary shares 5 million 10 million
Gross interest yield on loan capital (YTM) 8% 12%
Market value of loan R10 million R16 million

The annual growth rate in dividends is 5% for Tswinga Ltd and 8% for Muledane Ltd. Corporate tax rate is 28%.

Required:
a) Calculate the market value weighted average cost of capital (WACC) of Tswinga Ltd and of Muledane Ltd. (22 marks)
b) Discuss two possible reasons why the cost of ordinary share capital differs between the two businesses. (4 marks)

Related Discussions:- assinment

Ranking projects: NPV vs IRR Conflicts, how can i rank a project when there...

how can i rank a project when there are conflict between IRR & NPV

Explain internal rating system, Question 1: ‘An internal rating system ...

Question 1: ‘An internal rating system may incorporate supplementary customer information which is usually out of the reach of an external credit assessment institution.' Discu

Determine raw materials inventory-cost of goods sold, Lott Corporation show...

Lott Corporation showed the following balances in its inventory accounts as of January 1: Raw materials inventory $28,800 Work-in-process inventory 36,000 Finished goods i

Ssjdda, As the company''''s sales and earnings increased, so did the demand...

As the company''''s sales and earnings increased, so did the demand for capital. The firm''''s needs included inventory as well as additional space to house the inventory, computer

Purchase, I purchased an answers document from your site 5 hours ago and it...

I purchased an answers document from your site 5 hours ago and it isn''t still delivered. It said that it would take up to 2 hours but it isn''t still delivered. When will it be de

Nature of the efficient markets hypothesis, Question 1: i) Check the na...

Question 1: i) Check the nature of the efficient markets hypothesis (EMH). ii) Describe how the different forms of efficiency can be tested. Support your answer with some e

Describe briefly how electronic money works, Question: (a) Describe bri...

Question: (a) Describe briefly how electronic money works. (b) Give two benefits of e-money to each of the following: (i) consumers, and (ii) business. (c) Outline

#dividend policy, #the managing directors of three profitable listed compan...

#the managing directors of three profitable listed companies discussed their company''''s dividend policies. company A has deliberately paid no dividends for the past five years. c

A-note, A-Note is the highest tranche of an asset backed security or anothe...

A-Note is the highest tranche of an asset backed security or another structured financial product. An A-note is superior to other notes, like B-notes in bankruptcy or other credit

Trible bottom Line Assignment, I''m studying Accounting course, but English...

I''m studying Accounting course, but English is my second lauguage, it''s vey hard for me to do this, and time is runing out. would you help me with an assignment about the Trible

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