GREAT ZIMBABWE UNIVERSITY
MUNHUMUTAPA SCHOOL OF COMMERCE
STRATEGIC FINANCIAL MANAGEMENT
MODULE CODE MSM 508
A company has the following long-term capital outstanding as on 31 March 2016:
a. 10% debentures with a face value of $500 000. The debentures were issued in 2008 and are due on 31 March 2016. The current market price of a debenture is $950.
c. Sixty thousand ordinary shares of $10,00 par value. The share is currently selling at $50,00 per share. The dividends per share for the past several years are as follows:
Year $ Year $
2008 2,00 2012 2,80
2009 2,16 2013 3,08
2010 2,37 2014 3,38
2011 2,60 2015 3,70
Required; Assuming a tax rate of 35%, compute the firm’s weighted average cost of capital (WACC)
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