Capital structure Business & Marketing Research Paper (Research Paper Sample)
this paper involved calculations done based on data and instructons provided by the client. The calculations revolved around THE COST OF CAPITAL AND CAPITAL STRUCTURE.
source..
COST OF CAPITAL AND CAPITAL STRUCTURE
By Name
Class (Course)
Instructor (Tutor)
Institution
The City and State
The Date
Cost of Capital and Capital Structure
Question 1.
WACC = WACC = (cost of equity *weight of equity) + (cost of preference shares *weight of preference shares) + (cost of debt *weight of debt) (Mari and Marra, 2018).
Cost of equity = (dividend per share next year / Current share price) + growth (Mari and Marra, 2018).The cost of equity is computed using DCM, which assumes that dividends issued will grow at a constant rate. The dividend growth rate of ABC is:
Year
Dividend
Dividend growth rate
1
21
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