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13.13 & 13.17 Please uaing a projeL 13.13 WACC for a company: Capital Ltd has a capital structure that is financed, based on cur- rent

13.13 & 13.17 Please image text in transcribed
uaing a projeL 13.13 WACC for a company: Capital Ltd has a capital structure that is financed, based on cur- rent market values, with 50 per cent debt, 10 per cent preference shares and 40 per cent ordinary shares. If the return offered to the investors for each of those sources is 8 per cent, 10 per cent and 15 per cent for debt, preference shares and ordinary shares, respectively what is Capital Ltd's after-tax WACC? Assume that the company's corporate tax rate is 30 per cent. 13.14 WACC: What are direct out-of-pocket costs? 13.15 Finance balance sheet: Describe why the total value of all of the securities financing the 13.16 Finance balance sheet: Describe why the cost of capital for the company is equal to the 13.17 Current cost of a bond: You know that the after-tax cost of debt capital for Bubbles Cham company must be equal to the value of the company TE expected rate of return to the investors of the company pagne is 7 per cent. If the company has only one issue of 5.year maturity bonds outstanding. what is the current price of the bonds if the coupon rate on those bonds is 10 per cent? Assume the bonds make semiannual coupon payments and the corporate tax rate is 30 per cent

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