A company has 180 million of 10% debentrue having face valuie @100 each redeemable after 3 years and intrest paid annually. The current ex-intrest market value of debenture is 103, Pre tax cost of debenture will be ??? (PV of 1-3 years at 8% 2.577, 9% 2,531) ( pv at 3rd year at 8%=0.794, 9% =0.772)
April 09, 2020
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The followig is the capital structure of a company equity share @100 of 40Lakh, 9% preferrence share of 10Lakh, 11% debentrue of 30Lakh, retained earning 20LAkh. Current market price of equity share is 2000, for last year company paid dividend of 25% and it is likely to grow at 5% every year. corporate tax 30% , shareholder tax 20% compute WACC
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