A company has equity share capital of ₹50 Lakhs with specific cost of 13%, preference share capital of ₹30 Lakhs with specific cost of 11% and Bank Loan of ₹20 Lakhs with specific cost of 8% in its existing capital struc
CS Executive · Financial and Strategic Management · PYQS · December 2022
A company has equity share capital of ₹50 Lakhs with specific cost of 13%, preference share capital of ₹30 Lakhs with specific cost of 11% and Bank Loan of ₹20 Lakhs with specific cost of 8% in its existing capital structure. The company is planning to raise additional ₹50 Lakh through equity that is expected to cost 12%. If this amount is raised, the approx. marginal cost of capital will be : (A) 0.23% (B) 0.32% (C) 0.19% (D) 1.11%
Answer & Explanation:
Correct Answer: Option (C)
Official answer key: (C).
Topics: Financial Management
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