Calculating WACC | WACC Calculation

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Calculating WACC | WACC Calculation

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%.
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.

  Mudedla Srinivas Kumar

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.

  Antonio Villa Mardon
Economist, Peru


You need to modify the cost of equity as follows: (...)


Response to Calculation of WACC

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  Muhammad Wasim
Student (MBA), Pakistan

WACC Calculation

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  Rishi R Koirala
Teacher, Nepal

WACC Calculation

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  Blessing Katuka

Calculation of WACC

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  Ahid Moghal
Teacher, United Kingdom

Calculation of WACC

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