Question
a) The debt to equity ratio for a company is 0.4. The Risk free rate in the market is 7.32% and the beta for the
a) The debt to equity ratio for a company is 0.4. The Risk free rate in the market is 7.32% and the beta for the company is 1.28. The market premium is 12.6%. The tax rate for the company is 30%. The Cost of Debt is 8% for the company. If the Debt ratio changes to .6 what will be the WACC for the company.
b) Compay X has issued equity shares in the market with a face value of INR 10. The company has paid a divided of 2 for the latest financial. The dividend is expected to grow at the rate of 15% per annum. The current price of the shares of the company is 144. Given this information what is the cost of equity for this company.
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