Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please help me with this, thanks! n14 ed out of Information provided on Saucy Manufacturers Ltd is below What is the cost of debt for
please help me with this, thanks!
n14 ed out of Information provided on Saucy Manufacturers Ltd is below What is the cost of debt for Saucy? Equity R Ordinary share capital 2 950 000 Non-redeemable preference shares 1250 000 on Non-current liabilities Loans 3 000 000 Bonds 950 000 The current risk-free rate is 8%. The current return in the market is 14,8% The company has a coefficient of 1,45 The preference shares were issued two years ago to raise further capital at a dividend rate of 8,5% The 10% bonds are redeemable in five years at their par value of R900. Coupons are paid annually. The long-term loan is repayable on maturity in 10 years and carries an interest rate of 8,25% What is the average cost of pure debt (ie. ignoring preference shares) after tax for Saucy? The current risk-free rate is 8%. The current return in the market is 14,8% The company has a coefficient of 1,45 The preference shares were issued two years ago to raise further capital at a dividend rate 8,5%. The 10% bonds are redeemable in five years at their par value of R900. Coupons are paid annually. The long-term loan is repayable on maturity in 10 years and carries an interest rate of 8,25% What is the average cost of pure debt (i.e. ignoring preference shares) after tax for Saucy? O a. 6,24% O b. 7,26% O c. 5,95% od 7,62% n14 ed out of Information provided on Saucy Manufacturers Ltd is below What is the cost of debt for Saucy? Equity R Ordinary share capital 2 950 000 Non-redeemable preference shares 1250 000 on Non-current liabilities Loans 3 000 000 Bonds 950 000 The current risk-free rate is 8%. The current return in the market is 14,8% The company has a coefficient of 1,45 The preference shares were issued two years ago to raise further capital at a dividend rate of 8,5% The 10% bonds are redeemable in five years at their par value of R900. Coupons are paid annually. The long-term loan is repayable on maturity in 10 years and carries an interest rate of 8,25% What is the average cost of pure debt (ie. ignoring preference shares) after tax for Saucy? The current risk-free rate is 8%. The current return in the market is 14,8% The company has a coefficient of 1,45 The preference shares were issued two years ago to raise further capital at a dividend rate 8,5%. The 10% bonds are redeemable in five years at their par value of R900. Coupons are paid annually. The long-term loan is repayable on maturity in 10 years and carries an interest rate of 8,25% What is the average cost of pure debt (i.e. ignoring preference shares) after tax for Saucy? O a. 6,24% O b. 7,26% O c. 5,95% od 7,62%Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started