Question

4. 5. (c) Dividend Decisions. (d) Fund Flow Analysis. Section B A company was recently formed to manufacture a product. It has the following Capital Structure : S. No. Particulars Amount (Rs.) 1. 9% Debentures 6,00,000 2. 7% Preference Shares 2,00,000 3. Equity Shares (24,000 Equity Shares of Rs. 10 each) 6,00,000 4. Retained Earnings 4,00,000 Total 18,00,000 The Market Price of Equity Shares is Rs. 40 per share. A dividend of Rs. 4 per share is proposed. The company has a marginal tax rate 50%. Compute the Weighted Average Cost of the Capital of the company, ​

Answer 1

Answer:

the correct answer is c

Explanation:

the correct answer is c dividend decisions

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