WACC., Finance Basics

The following is the existing capital structure of Company XYZ Ltd.
Ordinary shares at Shs.10 par 1,000,000
Retained 800,000
12% preference shares Shs.10 par 400,000
16% loan Shs.100 par 300,000
Total capital employed Shs. 2,500,000
The company’s ordinary shares have a dividend cover of 3 times and pays a dividend of 10% on its ordinary share capital.
Ordinary shares sells at Shs.18
Preference shares sell at Shs.15
Debentures are selling at par. The tax rate is 30%
Compute:
a)Growth in Equity. (7 marks)
b)W.A.C.C. (8 marks)
Posted Date: 3/3/2013 7:40:14 AM | Location : Kenya







Related Discussions:- WACC., Assignment Help, Ask Question on WACC., Get Answer, Expert's Help, WACC. Discussions

Write discussion on WACC.
Your posts are moderated
Related Questions
Debtors Collection Period - Formula Fomula is given below: Debtors collection period = 365/ Debtors turnover Or (365 x Average debtors)/ Annual credit sales This

Pursuing self esteem ambitions and Creative Accounting Pursuing power and self esteem ambitions This is called "empire building" to enlarge the firm via acquisitions and me

A firm has a $100 million capital budget. It is considering two project, each costing $100 million. Project A has an IRR of 20%; has an NPV of $9 million; and will be terminated af

The operating income of H Ltd amounts to Rs. 186000. It pays 35% tax on its income. Its capital structure consists of the following: 14% Debentures

Charleston Industrial revised its dividend policy and decided that it wants to maintain a retained earnings account of $1 million. The company''s retained earnings account at the e

Stock Split and Reverse Split This is whereas a block of shares is broken down into smaller units or shares hence the number of ordinary shares rises and their respective par

Example of Valuation of Bonds and Debentures K is contemplating purchasing a 3 year bond worth 40,000/= carrying a nominal coupon rate of interest of 10 percent.  K necessary

Discuss the applicability of an operating cycle in the vegetable growing business

Determine the Component of Return Rate of return from an investment consists of the two: (i) Yield: Interest or dividend received is called yield. (ii) Capital Appreci

Financial analysis: Financial analysis (also defined to as financial statement analysis or accounting analysis or Analysis of finance) defines to an assessment of the viabilit