Weighted Average Cost of Capital Assignment
February 19th, 2020
Atul Mahindra. Ltd. has the following capital structure :
|Type of Financing||Book Value||Market Value|
|7.5% Preference Share Capital||12,00,000||10,00,000|
|Equity Share Capital||8,00,000||10,00,000|
Atul Mahindra Ltd. is in the 40% tax bracket,. The risk-free rate of return is 8% and the expected market risk premium is 7%. The equity beta of Atul Mahindra Ltd is 1.00. Calculate the weighted average cost of capital for Atul Mahindra Ltd. .