A firm has long term debt with the face value of 40 million rupees and the maturity of 15 years. The par value of one bond is Rs. 1000. When the bond was issued then the annual coupon rate was 13,5%. These bonds pay semiannual coupon payments. Currently, the yield to maturity on these kind of the bonds are 7% annually. The total number of common share outstanding for this firm are 4 million, with the current market price of the share is Rs. 20. The EPS is Rs. 4 the dividend is Rs. 3 and ROE is 20% for last few years. Lastly, there are 50,000 preferred stocks with Rs. 100 is the par value. It pays Rs. 2 as quarterly dividends and investor expects 11% required returns. If firm issues new preferred stocks, then Investors require the same return but the floatation cost of issue new PS would be 10%. What is the weighted average cost of capital of this firm? The corporate tax rate is 40%. (Expected time 6 minutes) None of the above 20.75 A firm has long term debt with the face value of 40 million rupees and the maturity of 15 years. The par value of one bond is Rs. 1000. When the bond was issued then the annual coupon rate was 13,5%. These bonds pay semiannual coupon payments. Currently, the yield to maturity on these kind of the bonds are 7% annually. The total number of common share outstanding for this firm are 4 million, with the current market price of the share is Rs. 20. The EPS is Rs. 4 the dividend is Rs. 3 and ROE is 20% for last few years. Lastly, there are 50,000 preferred stocks with Rs. 100 is the par value. It pays Rs. 2 as quarterly dividends and investor expects 11% required returns. If firm issues new preferred stocks, then Investors require the same return but the floatation cost of issue new PS would be 10%. What is the weighted average cost of capital of this firm? The corporate tax rate is 40%. (Expected time 6 minutes) None of the above 20.75