Corporate Finance and Related Business Decision-Making Process
Part A
WACC Calculation
Given Information:
Equity = 74000000 $
Debt:
Bank overdraft $ 670,000
Commercial bills (due 30th Jun 2019) $ 3,000,000
75% Coupon bonds (due Dec 2029 issued @$100 each) $ 150,000,000
Cost of Equity = 2
Cost of Debt = bank overdraft is 5.5% + commercial bills are 4.5% + 3.75% for coupons
Tax= 30%
The Solution Part
WACC = (Equity/Debt + Equity…
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