Stock10m. 10%Redeemable Preferred Stock2m. 8%Short-term Loan3m. 6%Bonds7m. Cost of equity12%&cost of debt8%. Tax rate 28%. Calculate WACC.

Start networking and exchanging professional insights

Register now or log in to join your professional community.

Next Question:
Cost of Redeemable Preference Share Capital is: ?
Posted by:
VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
20-September-2014

Financial Management Economics

Question added by Zaheer uddin Raja , Accounts Supervisor , Pakistan International Airlines
Date Posted: 2016/06/27

Upvote (0) Views (0) Followers (1) Answers (1) Report Question

Write an Answer
Register now or log in to answer.

1 Answers

Mohammed Altuwaijri

by Mohammed Altuwaijri

Value is 10m+2m+3m+7m =22m

WACC= (10/22)*0.12+(2/22)*0.10+[(3/22)*.08+(7/22)*.06]*(1-28)

WACC= 0.0636+0.0216= 0.0852 or 8.52 percent

Downvote Reply () Report

Popular Searches

Engineering Technicians Jobs Engineers Jobs Sales Executive Jobs Accountant Jobs Software Engineer Jobs

Write Your Answer

More Questions Like This

How will I obtain any needed short-term financing?
Top Answer: <p>You can get short term financing from banks.</p> See More

Answers (4)
Which of the following the short-term employee benefits do not include?
Top Answer: b. Bonuses payable more than12 months after the end of the period in which the related employee services ... See More

Answers (4)
Cash budgets are prepared on a short-term basis such as on a monthly, quarterly, or even weekly basis: (a) true (b) false.
Top Answer: <p>Its true</p> See More

Answers (11)
.... Fixed cost is : -
Top Answer: A cost that does not vary depending on production. So the answer is A - Fixed in long term. Eg: Rent ... See More

Answers (13)

Do you need help in adding the right keywords to your CV? Let our CV writing experts help you.