The firm has issued 5000 bonds at a FV of Rs. 1000 each, with a coupon of 8%, and a life of 10 years. Issue costs are 1% for bonds. The firm's tax rate is 30%.The firm's beta is 1.3 and the risk free rate is 5%, while the market risk premium is 8%. The firm has issued 5,000 preference shares with a FV of Rs. 100 each, carrying a dividend rate of 12% and a life of 15 years. Issue costs for preference shares are 1.5 %.

Find the firm's WACC.

Answer rating: 100% (QA)

To calculate the Weighted Average Cost of Capital WACC we need to consider the cost of equity cost o... View the full answer