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5) ABC ltd has the following capital structure: 4000 Equity share of rs. 100 each Rs. 400000 10% Pref Shares Rs. 100000 11% Debentures Rs.

5) ABC ltd has the following capital structure: 4000 Equity share of rs. 100 each Rs. 400000 10% Pref Shares Rs. 100000 11% Debentures Rs. 500000 The current market price of the share is Rs. 102. The company is expected to declare a dividend of Rs. 10 atthe end of the current year, with an expected growth rate of 10%. The applicable tax rate is 50%. (1) Find out the cost of equity and (2) WACC

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