An entity has the following information in its balance sheet. Ordinary shares of TZs 50 each TZS 2,500,000 1,000,000 The ordinary shares are currently quoted at TZS 130 each and the loan notes are trading at TZS 72 per shs100 nominal. The ordinary dividend of TZS 15 has just been paid with an expected growth rate of 10%. Corporation tax is currently 12% Unsecured loan notes 30% Required: Calculate the Weighted Average Cost of Capital (WACC) for this entity.

An entity has the following information in its balance sheet. Ordinary shares of TZs 50 each TZS 2,500,000 1,000,000 The ordinary shares are currently quoted at TZS 130 each and the loan notes are trading at TZS 72 per shs100 nominal. The ordinary dividend of TZS 15 has just been paid with an expected growth rate of 10%. Corporation tax is currently 12% Unsecured loan notes 30% Required: Calculate the Weighted Average Cost of Capital (WACC) for this entity.

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter10: Forecasting Financial Statement

Section: Chapter Questions

Problem 8QE

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