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XYZ Ltd. has the following capital structure: Sources of Fund Amt. (Rs.) Equity Capital (400000 shares at INR 10) 8% preference shares 10 % Debentures

XYZ Ltd. has the following capital structure: Sources of Fund Amt. (Rs.) Equity Capital (400000 shares at INR 10) 8% preference shares 10 % Debentures Total 4000000 2000000 4000000 10000000 Market price of equity is Rs. 20 and dividend to be paid by the company is Rs. 5 per share. Expected growth rate is 8%. Tax rate is 50%. Calculate the weighted average cost of capital (WACC).

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