A company has 1,00,000 outstanding equity shares of ₹100 each with current market price of ₹124, 50000 9% preference shares of ₹50 each with market price of ₹47.5 each and floatation cost of 3%. It also has 20000 8% debe
CS Executive · Financial and Strategic Management · PYQS · December 2022
A company has 1,00,000 outstanding equity shares of ₹100 each with current market price of ₹124, 50000 9% preference shares of ₹50 each with market price of ₹47.5 each and floatation cost of 3%. It also has 20000 8% debentures of ₹100 each, selling for ₹106 each presently. If the specific costs of equity shares, preference shares and debentures are 13.5%, 10% and 7.5% respectively, the WACC (%) of the company using book value weights is: (A) 12.06 (B) 13.31 (C) 11.78 (D) 13.81
Answer & Explanation:
Correct Answer: Option (A)
Official answer key: (A).
Topics: Financial Management
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