Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
The capital structure of ABC Ltd includes debt of Rs. 55 lakhs and Rs. 45 lakhs of equity. The debt carries interest rate of 15%
The capital structure of ABC Ltd includes debt of Rs. 55 lakhs and Rs. 45 lakhs of equity. The debt carries interest rate of 15% per annum. The average return of Sensex is 18%. The beta coefficient of ABC Ltd is 0.65. Tax rate is 25%. The current risk-free rate is 10%. What is the overall cost of capital of ABC Ltd?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started