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please help me with these two questions. thanks! on 9 t ered Manufacturers Ltd wishes to review its optimal capital structure. The company is concerned
please help me with these two questions. thanks!
on 9 t ered Manufacturers Ltd wishes to review its optimal capital structure. The company is concerned whether it is over-geared to meet its contractual financial payments. As part of their considerations to review their capital structure, they wish to know their debt/equity ratio. Calculate it using the information extracted from the balance sheet. d out of Extract from the balance sheet 3 on RIOO 000 Share capital Share premium Non-redeemable preference shares R1 500 000 R725 000 Long term loans R2 125 000 Financial lease liabilities R425 000 O a. 1,95:1 b. 1,10:1 c. 0,91:1 d. 2,05:1 Calculate the weighted average cost of debt alone for the company below, where long-term loans have an interest rate of 8,15%, and the finance lease liabilities have an interest rate of 7,95%. The tax rate is 28%. The cost of equity is 12,5%. The composition of the company's capital is shown by the percentages below. Share capital 25% Long term loans 40% Lease liabilities 35% Total Capital 100% O a. 5,70% O b. 5,80% O c. 8,05% d. 8,06%Step by Step Solution
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