Question
Weighted average Cost of capital for Lavi Ltd. is 12%.
Lavi Ltd. has issued equity worth Rs. 45 lakhs, 5% debt worth Rs. 15 lakhs and 6% preference shares worth Rs. 10 lakhs. The manager of this company wants to know the cost of equity applicable to the firm. The tax rate is 10%.Solution
WACC = Ke * We + Kp * Wp + Kd* (1-t) * Wd Let us calculate the Weight of each source of capital We = 45 / 70 = 0.64 Wd = 15 / 70 = 0.21 Wp = 10 / 70 = 0.15 Let us substitute the values in the equation 12% = Ke * 0.64 + 0.15 * 6% + 5% * (1-0.1) * 0.21 Ke = 15.8%
The Public Distribution System (PDS) is an Indian food security system which evolved as a system for distribution of food grains at affordable prices an...
Who developed The TeacherApp?
The fourth Buddhist Council was convened under the patronage of which ruler?
Recently which of the following institution presented the study on the theme - Alternative Sources of Financing for Municipal Corporations?
On which occasion did Prime Minister Narendra Modi launch the 'Mera Yuva Bharat (MY Bharat)' platform, and what is the key goal of this platform?
The Goods and Services Tax (GST) was implemented in which year?Â
National Mountaineering Day in India is celebrated on:
Where was the first India-Nordic summit held?
What was the primary focus of the Sixth Five Year Plan of India?
In 2021 the National Security Guard (NSG) marks its ______ Raising Day on 16 October.