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IDO Co has a capital structure as follows.
10m $0.50 ordinary shares 5
reserves 20
13% irredeemable loan notes 7the ordinary shares are currently quoted at $3.00, and the loan notes at $90. IDO Co has a cost of equity of 12% and pays corporation tax at a rate of 30%.
What is IDO Co’s WAAC?Doubt
In this question, the Ve has been calculated as $3*10 million shares. why is it not calculated as Ve = 10 million shares*$3/$0.50?
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