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4. Parineeti Ltd. is a firm in the auto ancillary business. The latest balance sheet of the company is given below (Rs. in Lakhs)Assets Fixed
4. Parineeti Ltd. is a firm in the auto ancillary business. The latest balance sheet of the company is given below (Rs. in Lakhs)Assets Fixed Assets Liabilities Equity Capital Preference Capital Reserves & Surplus Debentures 2,850 5,830 120 520 2,570 Investments 2,000 1,800 1,200 .950 Inventory Bank loan Current Liabilities & Provisions 8,920 8,920 Scanned by CamScanne Parineeti Ltd's preference capital has a post-tax cost of 13 percen. Parineeti Ltd's bonds have YTM of 10%. The bank loan was raised at interest rate of 14%. Parineeti Ltd's equity share is currently selling for Rs. 250. Its last dividend was Rs. 3 per share expected to grow at 15% per annum Parineeti Ltd's equity beta is 1.2, the risk-free rate is 8 percent, and the market rate of return is 16%. Parineeti Ltd's income tax tax rat is 33 percent. a.) Calculate the effective cost of loan and debentures of Parineeti Ltd b.) What is Parineeti Ltd's cost of equity using the dividend discount model c. What is Parineeti Ltd's cost of equity using CAPM model? d.) What is Parineeti Ltd's weighted average cost of capital
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