Weighted Average Cost os Capital, Corporate Finance

Weighted Average Cost os Capital, Corporate Finance

Assignment Help:

Motown Manufacturers are involved in the manufacturing of zips, buttons and sewing needles. they need to automate their plant (at a cost of R1 100 000) as a result of a sharp increase in cost of labour due to intermittent industrial action by labouur unions and the increasing labour cost. as their management accountant, you have been tasked to calculate their cost of capital. information is as follow:
- 1.8 million R1 ordinary shares trading at R2.20 per share
- 700 000 11\5 R2 preference shares, currently trading at R1.80 per share
- Debentures initially sold for R800 000, at 13% interest per annum, payable in 8 years

additional information:
-tha company has beta factor 1.35 and a risk free rate 9%
-tax rate 30% and return on market is 13%

current dividend paid on ordinary shares is 70c per share and a growth rate of 9% is maintained.
calculate WACC using CAPM

Related Discussions:- Weighted Average Cost os Capital

Accumulated earnings and profits, This is an accounting term which is appli...

This is an accounting term which is applicable to stockholders of closely going businesses. Accumulated earnings and profits are a company's net profits after subtracting distribut

Valuation of firms, I have done most of my work on myfinancelab.com need so...

I have done most of my work on myfinancelab.com need someone to complete the rest. Deadline is this sunday. Can i get help on that?

Calculate the present value of a company''s bonds, 1. How do you calculate ...

1. How do you calculate the present value of a Company's bonds? 2. "An analysis of the magnitude and stability of cash flows comparative to fixed charges is very important in de

Stock index options, Explain with proof that c >= max(S - X, 0), where c is...

Explain with proof that c >= max(S - X, 0), where c is the value of the European call option, S is the price of the underlying asset and X is the strike of the option. The follo

Investing, Suppose the dividends for the Seger Corporation over the past si...

Suppose the dividends for the Seger Corporation over the past six years were $1.36, $1.44, $1.53, $1.61, $1.71, and $1.76, respectively. Compute the expected share price at the end

571, Trevor Price bought 10-year bonds issued by Harvest Foods five years a...

Trevor Price bought 10-year bonds issued by Harvest Foods five years ago for $936.05. The bonds make semiannual coupon payments at a rate of 8.4 percent. If the current price of th

Net profit value & profitability index, hook industries is considering the ...

hook industries is considering the replacement of one of its old drill presses. three alternatives replacement presses are under consideration. the relevant cash flows associated w

Determining the contributing property, 1. A contributes property to X, a ne...

1. A contributes property to X, a newly formed corporation, in exchange for 75 shares. As part of the same transaction, B contributes services to X in exchange for the remaining 2

Banks, discuss in detail various sources ffom wherebabks can borrow funds w...

discuss in detail various sources ffom wherebabks can borrow funds within India

Fin, Archer Daniels Midland Company is considering buying a new farm that i...

Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12.10 million.

Write Your Message!

Name

Email id

Message

Verfication Code

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!

Submit Assignment

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