Archive Pages Design$type=blogging

Calculation of Cost of Capital

Mambo Ltd. Intends to raise sh 4800,000 from the different sources as shown below Sh. Ordinary share capital(per value Sh.20) 2,400 000 8% p...

Mambo Ltd. Intends to raise sh 4800,000 from the different sources as shown
below
Sh.
Ordinary share capital(per value Sh.20) 2,400 000
8% preference shares capital (per value 12) 960,000
18% Bank Loan 840, 000
20% debentures of sh 100 each 600, 000
Total 4800 000
Additional information:
The market price for the securities is:
Sh.
Ordinary shares 32
8% preference shares 15
20% Debentures 90
The company has maintained payment of ordinary dividend per share of Sh.4.00 and is expected to grow at 3 % per annum in perpetuity. The floatation costs for ordinary and preference share are sh 4.00 and sh.2.00 respectively
Calculate:
(i) Cost of each source of capital
(ii) Weighted average cost of capital

Anthony from Kenya

Important Resource for study

1.  Cost of Capital and its Method

2. WACC

3. Cost of Equity Capital

4. Cost of Preference Capital 
 

COMMENTS

Name

accounting Accounting Concepts Accounting Education accounting equation Accounting Solutions Algebra Answer the Questions and Become Master Balance Sheet bank Bodybuilding Education Business Business Education Business Environment Business Solutions CA Calculus cameras Career Solutions carpentry Computer Computer Basics Computer Hardware Computer Networking Computer Software Computer Solutions cooking education Corporate Accounting Corporate Law cost cost accounting CSE depreciation determinant drawing Drywall amp; Plaster e-accounting earn money Economics Education Education Education Solutions Electronics Email Examination Finance Education Finance Solutions financial Financial Accounting FIR Football Gambling Gambling Addiction Goldsmith Guest Writers Health Education Help History Home Building Home Building amp; Remodeling Home Maintenance amp; Repair Index Number India Indian Language Inspiration insurance internal audit Internet Internet Forum Jobs amp; Careers Journal journal entries journal entry Kenya Laptop Basics Law Education Law Solutions Learning Lecture Legal Education Linear algebra Linear Programming Malaysia Management Accounting Management Education Management Solutions Mathematics Education matrices Mobile motivation MS Excel Nepal Nigeria organisation Other Pakistan Personal Finance Philippines Photography Photoshop Software Picture Plumbing Education Probability Profiles provision real estate rectification Relationships amp; Family Religious Studies Result Sahas Saudi Arabia Science Education Self-Learning Skating Slideshow Solution Spiritual Education Sports Statistics Statistics Education stock Story svtuition Tablet Education Tally Tally Solutions Tally.ERP 9 tax Tax Solutions teaching Teaching Education Test Testimonials Travel amp; Events Trigonometry tuition TV Shows UK USA variance analysis VAT vector Video videos Vocational Education Web design website Wife Window Movie Maker Wordpress working capital Youth youtube
false
ltr
item
Svtuition: Calculation of Cost of Capital
Calculation of Cost of Capital
Svtuition
http://www.svtuition.com/2012/08/calculation-of-cost-of-capital.html
http://www.svtuition.com/
http://www.svtuition.com/
http://www.svtuition.com/2012/08/calculation-of-cost-of-capital.html
true
3065238051582539150
UTF-8
Not found any posts VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago