Capital structure - case study, finance, Other Engineering

Assignment Help:
The following is the capital structure of X ltd on 31st Dec2003

Rs in million

Equity capital (paid up) 563.50

Reserves and surplus 485.66

10% Irredeemable preference shares 56.00

10% Redeemable preference shares 28.18

15% Term loans 377.71

---------------------------------------
Total 1511.05


The share of the company is currently selling for Rs 36. The expected dividend next year is Rs 3.60 per share anticipated to be growing at 8% indefinitely. The redeemable preference shares were issued on 1 January 1997 with twelve-year maturity period. A similar issue today will be at Rs 93. The market price of 10% irredeemable preference share is Rs 81.81. The company had raised the term loan from IDBI in 1993. A similar loan will cost 10% today.

Assume an average tax rate of 35 percent. Calculate the weights average cost of capital for the company using book-value weights.


Related Discussions:- Capital structure - case study, finance

.quantifying financial risk, What is the standard deviation of return if we...

What is the standard deviation of return if we have the following two possible outcomes: a rise of 8.00 per cent with 0.58 probability or a fall of -6.00 per cent?

Propeller governing mode, Propeller governing mode: The speed lever is ...

Propeller governing mode: The speed lever is placed in the high position. The engine is operating at 97 percent. As the power lever is advanced ahead of the flight idle deten

Co2 molds (carbon dioxide moulding), CO 2  Molds (Carbon dioxide Moulding...

CO 2  Molds (Carbon dioxide Moulding) is the process of hardening the moulds and cores by using carbon dioxide and sodium silicate liquid base binder is one of the most widely u

Ignition systems in aircraft engine, IGNITION SYSTEMS The outline of a ...

IGNITION SYSTEMS The outline of a high energy ignition system is illustrated in the figure. Each high energy ignition unit has a low voltage supply which is controlled by the

Difference between income & expenditure statement, Difference between incom...

Difference between income & expenditure statement P&L is to be ready by the Company or Dealing Origination which evolved in Dealing of any commodity or manufacturing of completed e

Assignment Engineering Design 1, Prepare a list of questions that should be...

Prepare a list of questions that should be resolved in identifying each of the following problems: a. Develop an improved manual gearshift for a mountain bike. b. Develop a hands-f

Common faults - fire safety management, Common faults - Fire safety managem...

Common faults - Fire safety management: Common faults found are: Combustible items left in protected routes Locked exits Fire doors wedged open Exits obstru

Write Your Message!

Captcha
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