cost of capital

ABC Ltd. issues 12 % debentures of face value of Rs.100 each and realizeds Rs.95 per debenture for the comapny. It is redeemable after 10 years at 10% Premium. The company comes under 50% corporate tax. Calculte cost of debt.

(a)  

Five years ago, sona Limited issued 12 % irredeemable debentures at Rs. 103, at Rs. 3 premium to their par value of Rs. 100. The current market price of these debentures is Rs. 94. If the company pays corporate tax at a rate of 35 %, calculate its current cost of debenture capital ?

(a)  

Cost of equity of a company is 20 %. Rate of floatation cost is 5 %. Rate of personal income tax is 30 %. Calculate cost of retain earning ?

(a)  

Y Ltd. issues 14% prefernce shares of face value of Rs.100 each whch realizes Rs.92 per share for the company. The shares are repayable after 12 years at par. Calcualate the cost of preference shares.

(a)  

The following information availble from the balance sheet of a company;

Equity share capital (20,000 shares of 10 each) Rs. 2,00,000

Reserves and Surplus - Rs. 1,30,000

8% Debentures - Rs. 1,70,000

The rate of tax of the compnay is 50%. Current level of the equity dividend is 12%. Calcualate the WACC

(a)  

The market price of equity shares of NG Ltd. is Rs.140. If annual dividend expected by the investors is Rs.30 per share, determine the cost of capital.

(a)  

The market price of equity shares of a comapny is Rs.150. The comapny had paid a dividend of Rs.30 last year. The investors expect a growth of 5% in dividend every year. Clacualte the cost of equity capital.

(a)  

The cost of equity of a comapny is 20%. The persoal incometax rate is 30%. Assuming that dividend received is subject to tax and the cost of investment incuding brokerage is 2%. Determine the cost of retained earnings

(a)