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Krisztina
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I have been asked to calculate the WACC using the following info: Capital structure: Ordinary shares (fully paid) :1000000, preference shares: (11%) 400000, debentures: (10%) 600000. The ordinary share holders expect a divident of 14% per year. Corporate tax is estimated at 30%.
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I did a bit of work on the above challenge, but I'm not sure if I'm on the right track... could someone point out if there are any mistakes? (600,000/2.000,000 * 10% * (1-30%)) + (400,000/2.000,000 * 11%) + (1.000,000/2.000,000 * 14%) = 19.2% Thank you for any help provided. (...) Read more? Sign up for free
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Mudedla Srinivas Kumar
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Calculation of WACC
Though your calculation seems O.K. factoring for Cost of Equity would have made your calculation more refined. which is as follows: Cost of Equity should be : Risk Free return + Beta*Market price.
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Antonio Villa Mardon, Economist, Peru
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WACC
You need to modify the cost of equity as follows:
(...)
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bhavik
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Response to Calculation of WACC
Though the calculation is correct, you could have (...)
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Muhammad Wasim, Student (MBA), Pakistan
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WACC Calculation
As regards to this calculation, I got a result of (...)
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Rishi R Koirala, Teacher, Nepal
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WACC Calculation
If you calculate the WACC the following way:
600, (...)
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Blessing Katuka
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Calculation of WACC
Normally the following steps must be done to calcu (...)
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Ahid Moghal, Teacher, United Kingdom
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Calculation of WACC
I calculate using a tableau with 5 columns. That m (...)
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Special Interest Group Leader
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