Compute the weighted cost of capital

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Reference no: EM13257477

P limited provided the following information

Contributed Capital $

100,000 ordinary shares 100,000

50,000 (14% preference shares 50,000

NON-Current Liabilities

16% Debentures (face value$100) 60,000

18%Mortgage 42,400

Market Prices are given as fallows:

Ordinaryshares $1.50

Preferenceshares $1.12

Debentures $86.00

This business is planning to pay an ordinary dividend at the endof the year of 18 cents, which is expected to grow at 5% per annum.The company rate of tax is 30%. Calculate the weighted cost of capital (WACC) (Show all working)

Reference no: EM13257477

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