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
given profit margin 7%, total asset turnover is 1.94, Return on equity is 23.7%, what is the debt equity ratio


An insurance company offers you and end of year annuity of $48,000 per year for the next 20 years. They claim your return on the annuity is 9%. What is the most you would be willin

2 Questions QUESTION #1 LAPTOP SELECTION Jonna is in market to buy a new laptop. Six different machines are under consideration. All laptops are essentially the same, but they v

Accounting Exercise AVM 386 Fall 2014 Misty Mark, an infamous archer, decided to open an archery business called Bows and Biceps. The following is a list of transactions for Bows

Question: Suppose that a security is presently selling for a price of $65, the nominal interest rate is 8%, and the security volatility is 0.15. a) Determine Delta of a Euro

Logistics Management - Supply Chain Management The objectives of logistics management are to: Determine the best routes to market; air, rail or road Determine if w

Reasons for major Growth in Venture Capital Reasons for Significant Growth in the Developed Countries in Venture Capital i) Public attitude that is a favorable attitude

Example of Conversion Ratio and Conversion Price ABC Company Ltd books as:   10.000, Sh.20 ordinary share capital 10,000, Shs.10 8% preference share c

Types of Stock Markets 1. Over the Counter or OTC and Organised Exchange market This is whereas the selling and buying of securities is done through sellers and buyers ar