Question
From the below figures of XYZ Public Limited, calculate Weighted Average Cost of Capital (WACC) and annual cashflows required by its capital providers. Interest rate,
From the below figures of XYZ Public Limited, calculate Weighted Average Cost of Capital (WACC) and annual cashflows required by its capital providers.
Interest rate, kd 0.10
Statutory company tax rate, tc 0.30
Proportion of tc claimed by shareholders, 0.60
Market value of debt, D $20 000 000
Cost of equity capital, ke 0.20
Market value of equity, E $20 000 000
Show all relevant calculations and formulas used.
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Investment Science
Authors: David G. Luenberger
1st Edition
0195108094, 978-0195108095
