Adonai Estates Limited, established 10 years ago, is a listed medium size real estate development company in Ghana, its capital structure is made up of the following components. • 10,000 bomds face value of Ghs1,000. • 2 million shares of 7% preference stocks with face value Ghs 100 and • 5 million shares of common stocks. Yield to maturity of bonds with similar characteristics is 7%. The preference shares are selling for Ghs60 a share. The common stock has a beta of 1.5 and sells Ghs50 a share. Risk free rate is 3% and market retum is 15%. Tax rate is 16.5%. Required: What is Adonai Estate Limited weighted average cost of capital? |

Adonai Estates Limited, established 10 years ago, is a listed medium size real estate development company in Ghana, its capital structure is made up of the following components. • 10,000 bomds face value of Ghs1,000. • 2 million shares of 7% preference stocks with face value Ghs 100 and • 5 million shares of common stocks. Yield to maturity of bonds with similar characteristics is 7%. The preference shares are selling for Ghs60 a share. The common stock has a beta of 1.5 and sells Ghs50 a share. Risk free rate is 3% and market retum is 15%. Tax rate is 16.5%. Required: What is Adonai Estate Limited weighted average cost of capital? |

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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