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SECTION B: ATTEMPT ANY THREE QUESTIONS IN THIS SECTION. QUESTION 2 The following is the capital structure of Bunilo nle a stock market licted commons,
SECTION B: ATTEMPT ANY THREE QUESTIONS IN THIS SECTION. QUESTION 2 The following is the capital structure of Bunilo nle a stock market licted commons, The ordinary shares are trading at K1.20 ex-div per share while the bonds are quoted at K97.0 ex-int per K100 nominal. The firm pays tax at 25% per year. The company is expected to pay dividend of 6n per share at the end of the year. Once paid dividend growth will be constant at 10% per year. REQUIRED: (a) Calculate the weighted average cost of capital using market value weights. [15 marks] (b) Briefly discuss the advantages of a company being listed on the stock market. [5 marks] [Total: 20 marks]
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