[brain33]

Hi
Please advice how answer 18.6 % came acca p4

                 Ordinary shares, par value $1 600 Retained earnings 22,400 10% loan notes1,000 7% preference shares, par value $1 1,000

The current ex div ordinary share price is $5 per share. An ordinary dividend of 80 cents per share has just been paid. The dividend paid 2 years ago was 70 cents

The current ex div preference share price is 90 cents.

The loan notes are redeemable at par in 3 years’ time. They have a current ex interest market price of $95 per $100 loan note.

Tax is 30%.

Calculate the current weighted average cost of capital

The correct answer is

18.6%

[brain33]

Hi Sir
If I requested earlier something how to find that reply
regards

[brain33]

Hi Sir
bit confuse with 3.5 % 5 year interest for reedeemable debt
how to calculate with 3.5% discount rate annuity.
I requested because annuity table not showing 3.5 %. It is only showing in whole number
Regards

[brain33]

Thanks sir

[brain33]

c=28*0.8159-24*0.7054 e ~0.05*2

how it came c=7.53m

i know first part how to calculate
c=22.8452-16.9296
c=5.9156
but how to calculate on calculator e ~0.05*2

[brain33]

Very Good
Thank you very much

[brain33]

Thanks John

[Author]

Posts