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Hi sir, I would need your help to solve one of the quiz please.
Ordinary shares, par value $1 600
Retained earnings 22,400
10% loan notes 1,000
7% preference shares, par value $1 1,000The 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
thanks so much and hope to hear from you soon.
cheer
Sean Luo
I don’t know which quiz you are referring to.
Why are you attempting questions for which you do not have answers? You should be using a Revision Kit from one of the ACCA approved publishers.
This is a basic Paper FM question, and how to calculate this WACC is explained in detail in my free Paper FM lectures. You cannot expect me to type out all my lectures here 🙂
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