Q.1 Set. (A) ABC Company has assets of Rs.320,000 financed with Rs. 104,000 of debt and Rs. 180,000 of equity and a general reserve of Rs.36,000. The companys initial profits after interest and taxes for the current year were Rs.27, 000. It pays 8 percent interest on the debt. The company is in the 50 percent tax bracket. It has 1800 equity shares of Rs.100 each selling at a market price of Rs.120 per share. Calculate [4 x 2.5 = 10] (a) WACC (b) EPS (c) Comment on your calculations (d) Why is WACC the proper measure of calculating the cost of the capital?