Cost of Debt and Equity

7 Oct No Comments






Cost of Debt      
PVIF 6    
Interest rate x in PVIF formula    
1-1/1+x^10)/x      
The x in PVIF formula is 6.014772740431685 10.50%  
       
Cost of Equity      
3+1.39(12-3) 15.5%    
       
WACC to be used as required rate of return      
Debt 600000 10.50% 6.014772740431685
Equitgy 1400000 15.5% 0.1551
  2000000   26.0%
 
 





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