A new investment is under construction for which finance is to be raised. It will require...

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A new investment is under construction for which finance is to be raised. It will require a new issue of 10000 ordinary shares at Kshs, 40 per share and a further issue of long-term debt of 8,000 to raise cost of ordinary shares. The cost to realize the ordinary shares in money terms will now be 12% and the net cost of long-term debt is 10.5%. Required i. ii. iii. Determine the total amount of each capital that will be raised by the company if it plan materialize (4 marks) Determine net capital realized (4marks) Determine the average cost of capital (6marks) A new investment is under construction for which finance is to be raised. It will require a new issue of 10000 ordinary shares at Kshs, 40 per share and a further issue of long-term debt of 8,000 to raise cost of ordinary shares. The cost to realize the ordinary shares in money terms will now be 12% and the net cost of long-term debt is 10.5%. Required i. ii. iii. Determine the total amount of each capital that will be raised by the company if it plan materialize (4 marks) Determine net capital realized (4marks) Determine the average cost of capital (6marks)

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i Calculation of total amount of Each capital that will ... View the full answer