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Question 4 Quardicorp Limited can borrow at an annual interest rate of 8% compounded quarterly with a compensating balance requirement of 5%. It can issue
Question 4 Quardicorp Limited can borrow at an annual interest rate of 8% compounded quarterly with a compensating balance requirement of 5%. It can issue 16% Taka 100 preferred stock at Taka (100 +Last two digits of your ID Number) where floatation cost is 4%. The risk free rate is 4% and the market risk premium is 10%. The firm's beta is 1.28. Tax rate is 30%. Expected Capital Components and their mix: Debt Taka 6000 million Preferred Stock Taka 8000 million Common Equity Taka 6000 million (a) Estimate the cost of debt, cost of preferred stock and cost of retained earnings. (b) Estimate the WACC
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