A firm has a total capital of Rs 3,00,000 comprising of Rs 2,00,000 equity and Rs 1,00,000 debt. Debt involves 8% interest rate. Tax rate is 30%. The cost of equity is 15%. Find the weighted average...


A firm has a total capital of Rs 3,00,000 comprising of Rs 2,00,000 equity and Rs 1,00,000 debt. Debt involves 8% interest rate. Tax rate is 30%. The cost of equity is 15%. Find the weighted average cost of capital. Again, if the firm restructures the debt-equity ratio of 1:4 with the same amount of total capital, find the changed weighted average cost of capital.



May 04, 2022
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