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Wanguana Agricultural firm is a new company that has the following facts: The company issued 150,000 common stock that sold for sh.25 per share. The
Wanguana Agricultural firm is a new company that has the following facts: The company issued 150,000 common stock that sold for sh.25 per share. The expected dividend was sh.1.50 per share and was expected to grow at a constant rate of 10%.(Ke) The company raised additional funds by issuing 20,000, 5% irredeemable preference stock of sh. 25 at Sh.23 per share (Kp) It also issued 10,000, 14% debentures of Shs. 100 at Shs. 95 with a maturity period of 10 years. A 5 year loan of shs. 4,000,000 was also borrowed for expansion purposes at an interest rate of 12%. (KLn) Kln = interest ( 1-t) =12 (1-0.4) = 7.2% The corporate tax rate
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