Dhakas Cost of Capital. Dhaka is the largest and most successful garment maker in Dhaka, Bangladesh. It

Question:

Dhaka’s Cost of Capital. Dhaka is the largest and most successful garment maker in Dhaka, Bangladesh.

It has not yet entered the European market but is considering establishing both manufacturing and distribution facilities in the United Kingdom through a wholly owned subsidiary. It has approached two different investment banking advisors, Barclays and NatWest, for estimates of what its cost of capital would be several years into the future when it planned to list its U.K. subsidiary on the London Stock Exchange. Using the assumptions by the different advisors (shown in the following table), calculate the prospective costs of debt, and the WACC for Dhaka (U.K.).

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