Compute the weighted cost of capital

Assignment Help Accounting Basics

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

Questions Cloud

Contrast the united states involvement in recent conflicts : Discuss the statement "If you were a historian, what kinds of documents and artifacts would you study and then write about to help people in the future to understand the events of September 11, 2001."

What is the apr : A loan that compounds interest monthly has an EAR of 14.40 percent. What is the APR?

Cost of goods manufactured : If the amount of "Cost of Goods manufactured" during a period exceeds the amount of "Total manufacturing costs" for the period then:

Explain the initial concentration of lead nitrate : The initial concentration of lead(II)nitrate is 0.250M. and we used 1.00 ml. the lead(II)nitrate was titrated with 7.96 ml of 0.0500M of potassium iodide.

Compute the weighted cost of capital : 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)

How many years will it take the firm to pay off this debt : Berkley Trucking recently purchased a new truck costing $147,800. The firm financed this purchase at 7.6 percent interest with monthly payments of $2,100. How many years will it take the firm to pay off this debt?

How much will you have in eleven years : You are scheduled to receive $7,500 in three years. When you receive it, you will invest it for eight more years at 7.5 percent per year. How much will you have in eleven years?

Views of christianity found in confessions : Describe a specific aspect you see in the art and/or architecture of Ravenna that reflects Augustine’s views of Christianity found in Confessions and The City of God.

How much interest on interest will she have earned : how much interest on interest will she have earned by the time her daughter starts college? Assume she makes no further deposits or withdrawals.

User Account

All Pages