XYZ Corporation has 45,000 ordinary shares outstanding which are currently selling for 110 per share. The number of preference share outstanding is 30,000 and the book value of a share is $100 while the market value is $105. Company has issued 2500 bonds with face value of 1000. The Market value of bond is higher than the face value and it is $1,100. The required rate of return of ordinary shareholders, preference shareholders and bond holders are 10%, 12% and 15% respectively. The Company is subject to 30% corporate tax. Based on the information given; i. Calculate the market value of the firm ii. Calculate the capital structure weights iii. calculate the Weighted Average Cost of Capital (WACC) of the company
XYZ Corporation has 45,000 ordinary shares outstanding which are currently selling for 110 per share. The number of
The required
Based on the information given;
i. Calculate the market value of the firm
ii. Calculate the capital structure weights
iii. calculate the Weighted Average Cost of Capital (WACC) of the company
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