ABC Company has assets of Rs 320,000 financed with Rs. 104000 of debt and Rs 180000 of equity and a general reserve of Rs 36000. The company's initial profits after interest and taxes for the current year were 27000. It pays 8 percent interest on the debt. The company is in 50 percent tax bracket. It has 1800 equity shares of Rs 100 each selling at a market price of 120 per share. Please calculate

a) WACC

B) EPS

Comment on your calculations

Why is Wacc the proper measure of calculating the cost of capital