• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for September 2025 exams.
Get your discount code >>

Cost of debt and Equity

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Cost of debt and Equity

  • This topic has 1 reply, 2 voices, and was last updated 10 years ago by MikeLittle.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • October 21, 2014 at 2:40 pm #205243
    munthaliaunward
    Participant
    • Topics: 6
    • Replies: 2
    • ☆

    Kindly assist how to calculate this. its a bit confusing me.

    A company has the following capital structure: Debt 20%, Preference 28% and Equity 52%. Expected net income this year is $34,285.72 dividend payout ratio is 30% future earnings and dividends to grow at a constant rate of 9%. The co. paid a dividend of $3.6/share last year and its stock currently sells for $54/share. The Co.can obtain new capital in the following ways. i) A perpetual preference stock with an $10 dividend . currently selling for $90 but floatation cost will be 7% of mkt price.ii) Debt can be sold at 15%. (a)Determine the cost of each capital component (b) calculate WACC.

    October 21, 2014 at 2:46 pm #205245
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23321
    • ☆☆☆☆☆

    Hmmm! This is a fascinating question and I thank you for exposing it to me.

    However, it’s some way beyond the wit of an F7 tutor!

    Maybe better to post this in the Ask the Tutor forum for F9 ?

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • umangkumbhat on What is Assurance? – ACCA Audit and Assurance (AA)
  • ahmadhoney on How to register with ACCA?
  • John Moffat on Interest rate risk management (1) Part 5 – ACCA (AFM) lectures
  • osman-the-zephyr@ on MA Chapter 1 Questions Accounting for Management
  • adebusola on MA Chapter 1 Questions Accounting for Management

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in