Sincro Ltd's capital structure is as follows:

Debt

35%

Preference Shares

15%

Ordinary Share Capital

50%

Theafter-taxcostofdebtis6.5%;thecostofpreferencesharesis10%, andthecostofordinaryshare equityis13.5%.AsanalternativetotheexistingcapitalstructureforSincro,anoutsideconsultanthas suggested the followingmodifications:

Debt

60%

Preference Shares

5%

Ordinary Share Capital

35%

Under this new and more debt-oriented arrangement, the before-tax cost of debt is 8.5%; the cost of preference shares is 11%, and the cost of equity is 15.6%.

1. CalculateSincro'sexistingweighted average cost of capital(WACC).Your answer: a.%.Case sensitive: Type in 12.00 for 12.00%.
2. RecalculateSincro'sweightedaverage cost of capital (WACC), using the capital structure suggested by the outsideconsultant.Your answer:b.%.Case sensitive: Type in 12.00 for 12.00%.

, 39 seconds. Question Completion Status: Sincro Ltd's capital structure is as follows: Deb 35% Preference Shares 15% Ordinary Share Capital 50% The after-tax cost of debt is 6.5%; the cost of preference shares is 10%, and the cost of ordinary share equity is 13.5%. As an alternative to the existing capital structure for Sincro, an outside consultant has suggested the following modifications: Debt 60% Preference Shares 5% Ordinary Share Capital 35% Under this new and more debt-oriented arrangement, the before-tax cost of debt is 8.5%; the cost of preference shares is 11%, and the cost of equity is 15.6%. a. Calculate Sincro's existing weighted average cost of capital (WACC). Your answer: a. %. Case sensitive: Type in 12.00 for 12.00 b. Recalculate Sincro's weighted average cost of capital (WACC), using the capital structure suggested by the outside consultant. Your answer: b. 9%. Case sensitive: Type in 12.00 for 12.00%. Moving to another question will save this response. Question 7a747bcd-d307-4c..jpg WhatsApp Image..jpeg WhatsApp Image..jpeg