Q$.$No$.4$

Marks

Modi $2\mathrm{.}2$ Ltd has the following capital structure as per the Balance sheet as on ${31}^{st}$ Mar $2009$

Additional Information:

$($a$)$ Currently quoted prices in the stock exchange

Equity Shares

@ Rs$.64\mathrm{.}25$

; Preference Shares Rs$.90$ ; Debentures Rs$.95$

$($b$)$ For the last year, the Company had paid equity dividend of Rs$.8$ per share which is

expected to grow @ $5\%$ p$.$a$.$ forever.

$($c$)$ The corporate rate of tax is $30\%$

You are required to calculate Weighted Average cost of Capital using

$($i$)$ Book Value weights

$($ii$)$ Market value weights.

Q$.$No$.4$

Marks

Modi $2\mathrm{.}2$ Ltd has the following capital structure as per the Balance sheet as on ${31}^{st}$ Mar $2009$

Additional Information:

$($a$)$ Currently quoted prices in the stock exchange

Equity Shares

@ Rs$.64\mathrm{.}25$

; Preference Shares Rs$.90$ ; Debentures Rs$.95$

$($b$)$ For the last year, the Company had paid equity dividend of Rs$.8$ per share which is

expected to grow @ $5\%$ p$.$a$.$ forever.

$($c$)$ The corporate rate of tax is $30\%$

You are required to calculate Weighted Average cost of Capital using

$($i$)$ Book Value weights

$($ii$)$ Market value weights.