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i hope you can show me how to calculate Question 3 Si Papa Kedana Berhad has a target capital structure of RM120,000 common stocks, RM10,000
i hope you can show me how to calculate
Question 3 Si Papa Kedana Berhad has a target capital structure of RM120,000 common stocks, RM10,000 preferred stocks and RM70,000 debt. Its cost of preferred stocks is 6% and the cost of debt is 8%. The firm's beta is 1.2, the risk-free rate is 10%, and the average return on the market is 15%. The relevant tax rate is 35%. From the above information you are required to answer the below questions. a. Determine the cost of common stocks. (4 Marks) b. Based on your calculation in part (a), determine Si Papa Kedana Berhad's Weighted Average Cost of Capital (WACC). (6 Marks) (Total: 10 Marks)Step by Step Solution
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