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please complete asap Suntrack Ltd., a pharma company, was established in 1995 by Mr Ganpati. a renowned name in the medical profession. The company has

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Suntrack Ltd., a pharma company, was established in 1995 by Mr Ganpati. a renowned name in the medical profession. The company has one of the best research and developments facilities in the world and since its launch the company has already patented six products. Mr Ganpati's younger son Riteshwar has recently joined as the Director (Finance). Riteshwar is interested in modernizing the production facilities and for that company might be requiring Rs 100 crores. Before taking any decision, Riteshwar would like to know the existing cost of capital of the company. You are working as a General Manager (Finance) and Riteshwar tells you to meet him in the evening to have a discussion on the same. Existing Book Value Capital Structure Equity Capital (40 million shares, Rs 10 par) Rs 400 million Preference Capital, 9% ( 1 million preference Rs 100 million hares, Rs 100 par) Rs. 150 million Debentures, 11% (2 million debentures, Rs 100 Rs. 200 million ar) erm Loans, 12% Rs. 60 million Totale 910 million Additional information available: (a) Equity Capital: Next expected dividend is Rs 3 per share and dividend per share is expected to grow at rate of 4%. Current market price of share is Rs 30. (b) Preference Capital: Preference shares would be maturing at par after 7 years. Current market price of preference share is Rs 93. (c) Debentures: Debentures would be maturing at par after 4 years. Current market price of debenture is Rs 102. (cl) Tax rate for the company is 30%

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