Qs.1 Calculate the cost of capital of Larsen & Toubro Limited company based on publicly available information.

Take cost of equity as 1.06

For the risk-free return use the yield on 10 year Govt bonds i.e. 7.59%

Assume the market return at 15

% If any other method is used for calculating the cost of equity, make assumptions accordingly. Explain the method used in brief e.g. earnings growth method etc.

Calculate the cost of debt from the financial statements (Interest / total debt) (ensure you calculate the average value of debt, i.e. the average of the current year in consideration and the previous financial year)

Calculate the tax rate (Tax / PBT)