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.the company also has 9million per value of 12% debentures which are redeemable at a premium of 6% in 5 years.these debentures are currently trading at 106.the company has an accounting rate of return of 9% and retains 60% of its available profits.The company also has and 1.5million bank loan of 8% payable in four years.corporation tax is 28% .
You have not said what your problem is!
If you are expected me to provide an answer for you then that is not the purpose of this forum.
You must have an answer in the same book in which you found the question, so ask about whatever it is in the answer that you are not clear about and then I will explain 🙂
Have you watched my free lectures on the calculation of the WACC, because everything needed to be able to answer this question is explained in detail with examples (and this is all revision from Paper FM also)?
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