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sch You are GM finance of National Engineering Ltd. The company's current capital structure is: opean Devenable Rs million 400 300 10% Bonds (Rs 50
sch You are GM finance of National Engineering Ltd. The company's current capital structure is: opean Devenable Rs million 400 300 10% Bonds (Rs 50 each) 600 12 %Preference shares (Rs 20per share) Ordinary shares (Rs 10 par value) Retained earning 700 The company's current share price is Rs 30. The company paid a dividend of Rs 6 and it is expected to grow by 5% per yeary Market price of bond is Rs 60. Bond is redeemable at its par value of Rs50 after 5 years. Preference shares are irredeemable and are trading at Rs 25 per share. Find weighted average cost of capital by using market value based weights. Find weighted average cost of capital by using market value based weights. Q.NO: -2 You are GM finance of National Engineering Ltd. The company's current capital structure is: Rs million 20000 10% Bonds (Rs 100each) 10000 net 15 %Preference shares (Rs 10per share) 10000 Ordinary shares (Rs 10 par value) Retained earning 5000 per share. The company's beta is 1.5. The market yield rate is 15% and risk free rate is 5%. Market price of bond is Rs 105. Bond is redeemable at its par value of Rs100 after 5 years. Preference shares are irredeemable and are trading at Rs 9 Find weighted average cost of capital by using market value based weights. Find weighted average cost of capital by using market value based weights
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