A very good presentation

Enjoyable

I have a question: cost of capital = net revenue * WACC, right?.

Thanks

Assuming a firm is expecting a Perpetual Net operating interest of # 1,500 on asset of #15000 which are 100% Equity Financed and the firm Cost of Equity is 10%. The Firm is considering the substitution of Equity by debentures of #3000 at 6% interest rate with an increase in equity of 10.56%. The Firm is also considering the alternative on raising perpetual debentures of #6,000 to replace equity and The shareholders will charge 7% and the cost of debts such equity 12.5%. Required: 1. What will l be the cost of The equity and cost of debt at higher level of debts and of bower level. 2. What will be the value of the firm 3. What will be the WAAC - Weighted Average Cost Of Capital. 4. Write on the irrelevant structure of the cost of capital by the Net Income Approach and the Modigliani & Miller hypothesis with examples and also state the criticisim

Sir how do you have 12.26%

@kudzaincube1022

3 жыл бұрын

I encountered the same issue

@siphokhumalo5118

3 жыл бұрын

I'm also struggling on how to arrive there🤔

@acw1296

3 жыл бұрын

Thats the IRR

@noeldjondang1234

Жыл бұрын

How does he get 12,26%?

@shamskala9333

Жыл бұрын

@@noeldjondang1234 the PV have to be negative...