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Accountacy@UJ Ltd has 10 million R1.00 ordinary shares in issue that have a current market value of R2.00 per share. The company also has non-redeemable
Accountacy@UJ Ltd has 10 million R1.00 ordinary shares in issue that have a current market value of R2.00 per share. The company also has non-redeemable loan capital in issue with a nominal value of R20 million that is quoted at R150 per R100 nominal value. The cost of ordinary shares is estimated at 15% and the rate of interest on the loan capital is 12%. The rate of corporation tax is 28%.
Calculate Accountacy@UJs WACC (Weighted average cost of capital)
A. 13%
B. 11.18%
C. 10%
D. 13.5%
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