Question
ABC Ltd has the following capital structure: Book Value 7.7% Equity Capital (50,000 shares of $10 each) 500,000 13% Preference capital (1000 shares of $100
ABC Ltd has the following capital structure:
|
| Book Value |
| 7.7% Equity Capital (50,000 shares of $10 each) | 500,000 |
| 13% Preference capital (1000 shares of $100 each) | 100,000 |
| Reserves and Surplus | 300,000 |
| 12% Debentures (3000 debentures of $100 each) | 300,000 |
|
| 1.200,000 |
You are required to compute the weighted average cost of capital for the existing capital structure using book values as weights.
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Strategic Market Management
Authors: David A. Aaker
4th Edition
0471309567, 9780471309567
