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Please help me / Please help me .. Please i will upvote you . Question 3 TSL Bhd (TSL) is a property developer listed in
Please help me / Please help me .. Please i will upvote you .
Question 3 TSL Bhd (TSL) is a property developer listed in the Main board of Bursa Malaysia. TSL has 500 million ordinary shares on issue. The market price of its shares is RM0.65. The nominal value of its shares is RM0.50. TSL declared that it will pay dividends of RM25 million this year. Dividends are expected to grow at 4% per annum. TSL is also financed by RM500 million redeemable 3.8% bonds. These bonds will be redeemable in 4 years' time at par value. The current market price is RM98.70 per RM100 nominal value bond. Tax is 30% Required: a. Calculate the company's cost of equity. b. Calculate the company's cost of redeemable bond. C. Calculate the company's weighted average cost of capital (WACC). d, Explain why TSL should use WACC as the benchmark when assessing whether a project should be undertaken or not instead of the current criteria of approving only projects that offer an accounting rate of return of above 15%Step by Step Solution
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