Compute the cost of capital for mirza capital structure

Assignment Help Financial Accounting
Reference no: EM133239459

The following Capital structure is extracted from Mirza Corporation Sdn Bhd a multinational company producing electronic gadgets. The capital structure on Jun 2022 is as followed. The number of common stock outstanding was 40,000 units and value is RM$8,000,000. The preference share valued at RM$2,000,000 and expected dividend payout is 11%. The preferred stock par value is RM$1.00 and current internal trading price is RM1.08. We have taken debenture as loan which amount to RM$6,000,000 and pay 12% as interest rate. The par value of debenture is RM$100 and Market price is RM$90. The share of the company currently is traded for RM$25. The company is expected to pay a divided of RM$2 per common share which will grow at 7% forever. The tax bracket for the company is 40%.

1. Compute the Capital structure and the proportion

2. Compute the cost of the capital for Mirza's Capital structure.

3. Compute the weighted average cost of capital for the existing capital structure.

Reference no: EM133239459

Questions Cloud

How would that affect its net income : How would that affect its net income, assuming other things are held constant?
Crm effectiveness based on size and organizational structure : Identify what the advantages and disadvantages relative to CRM effectiveness based on size and organizational structure.
Relevant facts for operating budget : Prepare a Social Security Balance Sheet for the monthly periods from December of year 0 to December of year 1. Relevant facts for the Operating budget:
What is residual value : What is residual value? What is the implication to the lessee if the residual value is guaranteed or unguaranteed? What is the implication to the lessor?
Compute the cost of capital for mirza capital structure : Compute the Capital structure and the proportion Compute the cost of the capital for Mirza's Capital structure.
Ending balance in lincoln retained earnings account : Lincoln Corporation started the year with $509,000 in retained earnings. Determine the ending balance in Lincoln's retained earnings account.
Shah obtained from bond investment : Calculate the total realized return that Shah obtained from the bond investment. Provide a detail cash flow from the bond investment in the 3-year period.
What is proper cash flow : What is the proper cash flow amount to use as the initial investment? Show your computations.
The maturity value of the note : Is received from a customer on account. Use 30 day months and 360 day years in calculations of interest. The maturity value of the note is.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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