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Calculate the company's weighted average cost of capital (WACC) by using given data. The summarised Statement of Financial Position of D Co at 30 June
Calculate the company's weighted average cost of capital (WACC) by using given data.
The summarised Statement of Financial Position of D Co at 30 June 20X9 was as follows. The current price of the ordinary shares is 135c ex dividend. The dividend of 10c is payable during the next few days. The expected rate of growth of the dividend is 9% per annum. The current price of the preference shares is 77c and the dividend has recently been paid. The loan notes interest has also been paid recently and the loan notes are currently trading at $80 per $100 nominal. Assume that DC0 issued the loan notes one year ago to finance a new investment. Company income tax is at the rate of 30%. RequiredStep by Step Solution
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