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(4) Consider the information of the K Ltd. below as on 31st March 2020 (All are in Rs. Million) Equity Debt Face-Value Market Capitalization Net

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(4) Consider the information of the K Ltd. below as on 31st March 2020 (All are in Rs. Million) Equity Debt Face-Value Market Capitalization Net Income Book Value) (Market Value) 10 800 142.2 1000 2000 2 K Ltd is planning to invest in a new project that would be completely funded by equity. Find the Weighted Average Cost of Capital of K Ltd. For the new project. Other information: Risk Free Rate Historical standard deviation of returns of K ltd Historical standard deviation of the market Covarinace between K Ltd. Return and market retum Correlation between K ltd return and market return Market Risk Premium Last year market return Tax Rate of K Ltd Cost of debt of K Ltd 6.00% 20.00% 15.00% 0.0255 0.8500 10.00% 25.60% 30.00% 9.00% Marks (8)

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