Question

From the following particulars relating to the capital structure of Rainbow Lad. ealeulate the overall cost of capital. using (a) Book value weights and (h) Market value weights

Source of fund and its Book Value and Market value ;
1)Equity share capital -45,000-90,000
2)Retained Earnings- 15,000, -
3)Preference share-10,000 -10,000
4)capital ,Debentures -30,000- 30,000

The after tax cost of different sources of finance and Equity share cupital 14% Retained earnings 13% Preference share capital 10% Debentures 8.​

Answer 1

Explanation:

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