Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please can you help me with these two questions. thanks! 7 ed Key Stores Ltd has requested you to provide them with a calculation of

image text in transcribed

image text in transcribed

please can you help me with these two questions. thanks!

7 ed Key Stores Ltd has requested you to provide them with a calculation of their cost of debt. They provide you with the following information: long-term loans ABSA of R750 000 with an interest rate of 7,9%, asset-based finance loan from Sasfin for R275 000 at an interest rate of 9.75%. Assume the tax rate is 28%. What is the cost of debt for Key Stores? out of O a. 6,95% n O b. 6,05% O c. 7,25% O d. 5,92% 8 Pencils Ltd has a market value of debt of R295 000 and a market value of equity of R315 000. The pre-tax cost of debt is 8.25%, while equity has a cost of 14.5%. Calculate the correct weighted average cost of capital for Pencils Ltd. The tax rate is 28%. but of O a. 10,63% O b. 11,23% O c. 10,36% Od 10,95%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Business Accounting Volume 2

Authors: Frank Wood, Alan Sangster

6th Edition

0273039148, 9780273039143

More Books

Students also viewed these Accounting questions

Question

Whether the board has jurisdiction to conduct an election.

Answered: 1 week ago