present capital structure equity shares face value 240 million 360 120 120 Tax rate 90%.

Question-3 The present capital structure (based on book value) of a company is as follows: Equity shares (Rs. 10 face value) Rs.240 million Reserves Rs.360 million 11% Pref. shares (Rs. 10 face value) Rs. 120 million 12 % Debentures Rs. 120 million 14% Term loans Rs.360 milion Question-3...Cont'd Additionally the following information are available. Company's equity beta 1.06 Yield on LT Treasury bonds 10% Stock market risk premium Current ex-div. equity share price Rs. 15 Current ex-div. prof. share price Rs. 12 Current ex-int. debenture market value Rs.102.50 Corporate tax rate 40% 6% Rs. 1 200 million The debentures are redeemable after 3 years. Calculate the company's WACC. Ignore floatation costs. Interest on debentures paid annually