Bishop Co has previously calculated figures as follows: Ke = 18.5%, market value of 1 ordinary share = $2.50 Kp = 5.4%, market value of one preference share = $1.95 Kd(1–t)’ (irredeemable debt) = 7%, market value per $100 nominal value =$105 Kd(1–t)’ (redeemable debt) = 6.9%, market value per $100 nominal value =$93.96 Kd(1–t)’ (non tradable debt) = 5.4%, book value $2m. Kp = 6%, market value of one preference share(non-cummulative) = $1.70 In addition the following information is relevant: Ordinary shares in issue 3.8 million Preference shares in issue 2.5 million Preference shares (non-cummulative) in issue 1 million Nominal value in issue of irredeemable loan notes = $6 million Nominal value of redeemable loan notes in issue = $0.8 million. Required:- Calculate the current WACC by market value
Bishop Co has previously calculated figures as follows:
Ke = 18.5%, market value of 1 ordinary share = $2.50
Kp = 5.4%, market value of one
Kd(1–t)’ (irredeemable debt) = 7%, market value per $100 nominal
value =$105
Kd(1–t)’ (redeemable debt) = 6.9%, market value per $100 nominal
value =$93.96
Kd(1–t)’ (non tradable debt) = 5.4%, book value $2m.
Kp = 6%, market value of one preference share(non-cummulative)
= $1.70
In addition the following information is relevant:
Ordinary shares in issue 3.8 million
Preference shares in issue 2.5 million
Preference shares (non-cummulative) in issue 1 million
Nominal value in issue of irredeemable loan notes = $6 million
Nominal value of redeemable loan notes in issue = $0.8 million.
Required:-
Calculate the current WACC by market values.
Step by step
Solved in 2 steps with 1 images
