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(iv) Navaliya PLC. has the following information related to it cost of capital. Current selling price of an equity share (Rs.) Current growth rate of
(iv) Navaliya PLC. has the following information related to it cost of capital. Current selling price of an equity share (Rs.) Current growth rate of the share Most recently paid dividend (D) (Rs.) Floatation cost Shareholders tax Cost of debt after tax 75.00 6.0% 5.00 3.0% 30.0% 6.0% The company has the following capital structure as at 31 March 2015. Debt capital Retained earnings Equity share capital (Rs. Million) 80 20 100 You are required to calculate (a) Cost of retained earnings. (b) Cost of equity capital. (c) Weighted average cost of capital. (06 marks)
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