WACC, Financial Management

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: 3/22/2013 12:55:38 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
The Final Project for this module is a consultancy report to Anthony’s Orchard, an expanding apple orchard and distributor. The company has been entertaining the idea of expanding


XYZ company produces three products X,Y and Z. for the coming accounting period budgets are to be prepared based on following information. Budgeted Sales Product X       2,00

Q. Report on the valuation of Endess? Ideally the valuation must be based upon the present value of incremental cash flows that result from the buy-in but in practice this data

Process of Ambiguity - profit maximisation criterion One practical difficulty with profit maximisation criterion for financial decision making is that term-profit is a vagu

Cash flow from investing activities The items included in this heading are: Cash payments Cash receipts Acquiring proper


Discuss the applicability of an operating in vegetable growing business in Uganda.


Solutions to this Conflict In common, to make sure that managers act to the best interest of shareholders, the firm will: (a) Acquire Agency Costs in the form of: