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  • Working Note Calculation of RM: SL No Difference Value %value

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    Atish Pradhan
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    This document contains calculations to determine the weighted average cost of capital (WACC) for a company. It first calculates the weighted cost of debt as 0.00017 based on an interest rate of 11% and a tax rate of 40%. It then calculates the cost of equity as 9.68% using the capital asset pricing model formula. Finally, it determines the overall WACC as 7.18% by taking a weighted average of the cost of debt and equity based on their proportions of total capital.

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    FM

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    FM 2 Assgm

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    This document contains calculations to determine the weighted average cost of capital (WACC) for a company. It first calculates the weighted cost of debt as 0.00017 based on an interest rate of 11% and a tax rate of 40%. It then calculates the cost of equity as 9.68% using the capital asset pricing model formula. Finally, it determines the overall WACC as 7.18% by taking a weighted average of the cost of debt and equity based on their proportions of total capital.

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    Download as XLSX, PDF, TXT or read online from Scribd
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    15 views3 pages

    Working Note Calculation of RM: SL No Difference Value %value

    Uploaded by

    Atish Pradhan
    This document contains calculations to determine the weighted average cost of capital (WACC) for a company. It first calculates the weighted cost of debt as 0.00017 based on an interest rate of 11% and a tax rate of 40%. It then calculates the cost of equity as 9.68% using the capital asset pricing model formula. Finally, it determines the overall WACC as 7.18% by taking a weighted average of the cost of debt and equity based on their proportions of total capital.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 3

    Working Note

    Calculation of RM

    Sl No Difference Value %value


    1 18.70 2.96
    2 0.00 0.00
    3 108.60 17.73
    4 14.80 2.94
    5 7.20 1.47
    6 24.20 5.02
    7 29.70 6.49
    8 42.30 9.88
    9 3.85 0.99
    10 -8.00 -2.09
    11 -26.95 -6.91
    12 -42.20 -10.12

    28.36
    RM = 2.3633333333

    Calculation Of WACC
    Structure Amount After Tax Cost Weight
    (Rs. In Million)
    Cost of Borrowing 1742 0.00066 0.26
    Cost of Equity share capital 4868 0.09680 0.74

    Total 6610 1
    Percentage Value
    C
    Weighted Cost

    0.00017
    0.07163

    0.0718
    7.18
    Ke = Rf + (Rf-Rm)B Kd= I/B0(1-t)
    Rf = 6.66% or 0.0666 I = 11% or 0.11
    Rm = 2.36% or 0.0236 t = 40% or 0.40
    B0 = 100

    Ke = Kd=
    0.0666+(0.0666-0.0236)0.7034 0.11/100 (1-0.40)
    0.0666+0.043*0.7034 0.00066 or 0.066%
    0.0666+0.0302
    0.0968 or 9.68%

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