Question
Atul Mahindra. Ltd. has the following capital structure : Type of Financing Book Value Market Value 8% Non-Convertible Debentures (NCD) 5,00,000 5 ,00,000 7.5% Preference
Atul Mahindra. Ltd. has the following capital structure :
| Type of Financing | Book Value | Market Value |
| 8% Non-Convertible Debentures (NCD) | 5,00,000 | 5 ,00,000 |
| 7.5% Preference Share Capital | 12,00,000 | 10,00,000 |
|
| ||
| Equity Share Capital | 8,00,000 | 10,00,000 |
| Total | 25,00,000 | 25,00,000 |
Atul Mahindra Ltd. is in the 40% tax bracket,. The risk-free rate of return is 8% and the expected market risk premium is 7%. The equity beta of Atul Mahindra Ltd, is 1.00. Calculate the weighted average cost of capital for Atul Mahindra Ltd.
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GLP Quality Audit Manual
Authors: Milton A. Anderson
3rd Edition
0367398435, 978-0367398439
