Institute of Professional Education and Research (Technical Campus) Practice Book-Solutions
Institute of Professional Education and Research (Technical Campus) Practice Book-Solutions
(TECHNICAL CAMPUS)
PRACTICE BOOK-SOLUTIONS
Module 3
Solution 1
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TE OF PROFESSIONAL EDUCATION AND RESEARCH (TECHNICAL CAMPUS)
Solution 2
INSTITUTE OF PROFESSIONAL EDUCATION AND RESEARCH (TECHNICAL CAMPUS)
Solution 3
INSTITUTE OF PROFESSIONAL EDUCATION AND RESEARCH (TECHNICAL CAMPUS)
Solution 4
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TUTE OF PROFESSIONAL EDUCATION AND RESEARCH (TECHNICAL CAMPUS)
Solution 5
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Solution 6
INSTITUTE OF PROFESSIONAL EDUCATION AND RESEARCH (TECHNICAL CAMPUS)
Solution 7
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PROFESSIONAL EDUCATION AND RESEARCH (TECHNICAL CAMPUS)
Solution 8
INSTITUTE OF PROFESSIONAL EDUCATION AND RESEARCH (TECHNICAL CAMPUS)
INSTITUTE
Solution 9
Therefore, value of equity, E = 1650-1000 = 650.00
Cost of equity, Ke is given by: Ke =Ko + (Ko - Kd)(1 - T) D/E
Ke = 0.15 + (0.15 - 0.1) (0.65)1000/650 = 20%
WACC = Ke x E/V + Kd (1 - T) x D/V= 11.72%