Book Value of Equity Share 100 Face Value of Equity Share 100

Price of Equity Share 150 Price of preference share 130

Div-0 25 Rate of dividend 15%
Expected Growth rate 5%
Ke Kp

Weighted Average Cost of Capital

Source Units Amount Weight Cost of Capital
Equity Shares 100000
Preference Shares 50000
Debentures 60000
Retained earnings - 4000000
Total 4000000
WACC
Face Value of Debenture 100
Coupon rate 12%
Tax 30%

Kd
 Traditional Approach
Wd We Kd Ke WACC
0 10% 20%
0.05 10% 20%
0.1 10% 20%
0.15 10.00% 20%
0.2 10% 20%
0.25 10.50% 21%
0.3 11% 22%
0.35 11.50% 23%
0.4 12% 24%
0.45 12.50% 25%
0.5 13% 27%
0.55 13.50% 29%
0.6 14% 31%
0.65 14.50% 33%
0.7 15% 35%
0.75 15.50% 37%
0.8 16% 40%
0.85 16.50% 43%
0.9 17% 45%