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Please explain and answer in detail! Thank you 4. Market value weights are superior to book value weights Comment The following is the capital structure
Please explain and answer in detail! Thank you
4. Market value weights are superior to book value weights" Comment The following is the capital structure of XYZ Ltd. Sources Amount (Rs.) Specific Cost of Capital 50,00,000 10% Equity Share Capital (5,00,000 equity shares of Rs. 10 each) Preference Share Capital (1,50,000 shares of Rs. 10 each) 10% Debentures of Rs. 1,000 each Retained Earnings 15,00,000 8% 20,00,000 5% 25,00,000 10% Presently, the debentures are being traded at 90%, preference shares at par and the equity shares at Rs. 15 per share. Find out the WACC based on book value weights and market value weightsStep by Step Solution
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