Q2 Long term capital structure of company KL is given below Sources of capital Book value ($ 000) L T Debts 30,000 Preferred stock 5,000 Common stock 6,000 Reserves(re) 19,500 Total capital 60,500 The overall interest rate of debt is 10 , the dividend for common stockholders is $1 3per share and $1 5 for preferred stock per share, respectively Preferred and stock price is $13 per share Net income of the Company is expected to be paid 40 as a dividend and 60 will be added to the retained earnings The IRR of the company has been measured lastly as 15 , the growth rate of the dividend is 0 06 Suppose that the average income tax ratio is 30 and the corporate tax ratio is 25 , calculate and interpret the WACC of the Company

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Q2  Long term capital structure of company KL is given below  Sources of capital Book value ($ 000) L T  Debts 30,000 Preferred stock 5,000 Common stock 6,000 Reserves(re) 19,500 Total capital 60,500 The overall interest rate of debt is 10 , the dividend for common stockholders is $1 3per share and $1 5 for preferred stock per share, respectively  Preferred  and stock price is $13 per share  Net income of the Company is expected to be paid 40  as a dividend and 60  will be added to the retained earnings  The IRR of the company has been measured lastly as 15 , the growth rate of the dividend is 0 06  Suppose that the average income tax ratio is 30   and the corporate tax ratio is 25  , calculate and interpret the WACC of the Company

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Q2. Long term capital structure of company KL is given below: Sources of capital Book value ($ 000) L.T. Debts 30,000 Preferred stock 5,000 Common

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