C plc is financed by 10 million 1 ordinary shares and 8,000,000 8% redeemable bonds having...

 

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C plc is financed by 10 million £1 ordinary shares and £8,000,000 8% redeemable bonds having market values of £1.60 ex div and £90% ex interest respectively. A dividend of 30p has just been paid and future dividends are expected to grow by 5%. The bonds are redeemable at par in five years time. Required If taxation is 30%, calculate the WACC. C plc is financed by 10 million £1 ordinary shares and £8,000,000 8% redeemable bonds having market values of £1.60 ex div and £90% ex interest respectively. A dividend of 30p has just been paid and future dividends are expected to grow by 5%. The bonds are redeemable at par in five years time. Required If taxation is 30%, calculate the WACC.

Answer rating: 100% (QA)

Answer Market value of equity 160 10 million 16 million Market value of debt 90 of 8 million 72 ... View the full answer