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With the help of the given information and given data, you need to work out the individual costs and value of each of the sources

With the help of the given information and given data, you need to work out the individual costs and value of each of the sources of capital and apply that to the WACC equation to work out the overall weighted cost.

image text in transcribedimage text in transcribed

Beta value:

1.539511864

Adjusted Beta value:

1.361472949
Balance Sheet of Kidman Resources as of 30 June 2019 Extract of Balance Sheet for Kidman Resources $ million Issued Capital 322,000,000 Ordinary shares of $2.70 full paid 4,500,000 3.8% Preference Shares of $1.00 fully paid 869.40 4.50 Current Liabilities and Provisions Bank Overdraft 4.00 Trade Creditors 7.00 Unsecured Notes 3.50 Non-Current Liabilities Debentures 15.00 Term Loans 3.00 Mortgage 12.00 The company's preference shares are currently trading at $0.80 each. The company's ordinary shares are currently trading at $1.75 each. The risk-free rate of return is 2.48 % p.a., and the return on the market is 6.75 % p.a. Debentures have a coupon interest rate of 8% p.a. and could be re-issued at the present time at an interest rate of 6% p.a. The debentures will be redeemed at their face value in three years' time. Face value is as per the balance sheet. The mortgage loan is repayable in five years' time and the current interest rate is 3.75% p.a. The mortgage was initially negotiated at 6.15% p.a. Term loans have a current interest rate of 4% p.a., but were negotiated at an interest rate of 5% p.a. They are repayable in full in three years' time. The term loans consists of regular semi-annually interest payments with the principal repaid at maturity Unsecured notes will mature in six months and will not be replaced. They have a current interest rate of 3.82% p.a. The current interest rate on the bank overdraft is 4.0% p.a. Interest on all debt securities is paid twice-yearly and the corporate tax-rate is 25 percent Balance Sheet of Kidman Resources as of 30 June 2019 Extract of Balance Sheet for Kidman Resources $ million Issued Capital 322,000,000 Ordinary shares of $2.70 full paid 4,500,000 3.8% Preference Shares of $1.00 fully paid 869.40 4.50 Current Liabilities and Provisions Bank Overdraft 4.00 Trade Creditors 7.00 Unsecured Notes 3.50 Non-Current Liabilities Debentures 15.00 Term Loans 3.00 Mortgage 12.00 The company's preference shares are currently trading at $0.80 each. The company's ordinary shares are currently trading at $1.75 each. The risk-free rate of return is 2.48 % p.a., and the return on the market is 6.75 % p.a. Debentures have a coupon interest rate of 8% p.a. and could be re-issued at the present time at an interest rate of 6% p.a. The debentures will be redeemed at their face value in three years' time. Face value is as per the balance sheet. The mortgage loan is repayable in five years' time and the current interest rate is 3.75% p.a. The mortgage was initially negotiated at 6.15% p.a. Term loans have a current interest rate of 4% p.a., but were negotiated at an interest rate of 5% p.a. They are repayable in full in three years' time. The term loans consists of regular semi-annually interest payments with the principal repaid at maturity Unsecured notes will mature in six months and will not be replaced. They have a current interest rate of 3.82% p.a. The current interest rate on the bank overdraft is 4.0% p.a. Interest on all debt securities is paid twice-yearly and the corporate tax-rate is 25 percent

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