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The Kay Company has the following Capital structure as at 31st March,


                                    Based on Book Value Based on Market Value             % Costs

            Debentures                300,000                                     330,000                7                 

            Preference                  100,000                                    110,000                9

            Equity                     1,500,000                                   1,700,000            15

            Debt                           200,000                                    180,000              10

            Required :

            Determine the Weighted Average cost of capital using :

a)     Book Value weights                                                                                                

b)    Market Value weights

What are the factors affecting Cost of Capital ?        

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wacc based on book value basis =... View the full answer

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