collection with each component. ABC Company needs Tk 32,00,000 for the expansion of its business. The manager

 collection with each component.

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ABC Company needs Tk 32,00,000 for the expansion of its business. The manager of the company decided to raise the funds as follows: I. Issuing common stock for Tk 12,00,000 with Tk. 100 each with flotation cost of 6.5%. The company's next expected dividend is Tk. 22.5 per share and the dividend payout ratio is 34% where the return from its reinvestment is 13.5%. II. III. The firm plans to issue 11% bond with a face value of 2500 for 20 years to manage Tk. 15,00,000. The company is in the tax bracket of 34%. Issuing 8.5% preferred stock for Tk.100 each with flotation cost of 4.5% for collecting the remaining needed capital. From the above data calculate - i. The cost of each components of capital structure. ii. The WACC where the weights are taken as the proportion of ABC Company needs Tk 32,00,000 for the expansion of its business. The manager of the company decided to raise the funds as follows: I. Issuing common stock for Tk 12,00,000 with Tk. 100 each with flotation cost of 6.5%. The company's next expected dividend is Tk. 22.5 per share and the dividend payout ratio is 34% where the return from its reinvestment is 13.5%. II. III. The firm plans to issue 11% bond with a face value of 2500 for 20 years to manage Tk. 15,00,000. The company is in the tax bracket of 34%. Issuing 8.5% preferred stock for Tk.100 each with flotation cost of 4.5% for collecting the remaining needed capital. From the above data calculate - i. The cost of each components of capital structure. ii. The WACC where the weights are taken as the proportion of

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To calculate the cost of each component of the capital structure and the Weighted Average Cost of Capital WACC well analyze each source of funding sep... View the full answer