Question
PTL Bhd has issued 5 million ordinary shares, with a market price of RM9 each. The company has RM1 million of irredeemable 13% debentures in
PTL Bhd has issued 5 million ordinary shares, with a market price of RM9 each.
The company has RM1 million of irredeemable 13% debentures in issue, with a
market price of RM85 per RM100 nominal value. It also has issued 500,000
preference shares at 15%, with a nominal value per share of RM1, and with a
market value of RM1.45. The tax rate is 25% per annum. Recently, the company
has recorded its current earnings of RM1.5 million, and paid dividends in the past
years as below:
2016: RM0.60
2017: RM0.90
2018: RM1.00
2019: RM0.85
2020: RM0.70
Required:
Using the information given above, calculate the weighted average cost of capital
of PTL Bhd. (14 marks)
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