- ILM L 7 unit 700 Assignment : Understanding the Principles and Practice of Effective Coaching and Mentoring at an Executive or Senior Level
- A Comprehensive Assignment Report – Unit 804 Strategic Direction in Cross-Border and Global Business
- BTEC Unit 7 Calculus Assignment: Integration Methods, Motion Analysis, Work & Cooling Law Applications
- BTEC Level 3 Unit 7 Engineering Calculus Assignment: Differentiation Applications, Graphs & Optimisation Problems
- ILM Unit 8605-417 Managing & Implementing Change in the Workplace Assignment: Analysis, Opportunities & Action Plan
- 7NDEMP02 Patient Management in Advanced Collision Tumour: Surgical, Postoperative, and Prosthetic Rehabilitation Considerations
- ATHE Level 4 Unit 12 Web Design Assignment: CTO Birdwatching Message Board Using Full-Stack Development
- ATHE Level 4 Unit 15 Software Testing Assignment: TDD & BDD Strategies for Python-Based Medical Data Validator
- ATHE Level 4 Unit 21 Computing Project Assignment: E-Learning Platform Design & Planning for Scalable Online Education
- CMI Level 521 Assignment: DKM&X Case Study for Data-Driven Decision Making
- ATHE Level 7 Financial Reporting Assignment: Ethics & Group Statements Case Guide for Trainee Accountants
- Public Health Poster Assignment: Historical and Organisational Analysis in a National Context
- CMI Level 5 Operational Plan Assignment: CMI Case Study on Delivering Strategic Goals in a Large Organisation
- CIPD 7C001 Assignment: Explore Key Trends, Tech Impacts, Change Models & Bias in People Management
- 7CO02 CIPD Level 7 Assignment: Strategic & Ethical People Management Practices Across Sectors
- CIPD level 5HR02 Assignment: Talent Management and Workforce Planning Unit Guide
- Level 3 D/615/3823 Assignment: Regulation, Protection, and Collaborative Practice in Health and Social Care
- ILM Level 4 Assignment 01: Developing Leadership Styles: An Action Plan for Effective Leadership and Team Engagement
- Level 6 Unit T/615/2726 Assignment: Strategic Project Management: Identifying, Planning, and Controlling Projects for Business Success
- EDD-U1-T4 Assignment: Internal and External Support Services for Educational Practitioners
FIN6003 Delta Ltd wishes to calculate its current cost of capital for use as a discount rate in investment appraisal: Financial Management Assignment, AU, UK
| University | Arden University (AU) |
| Subject | FIN6003 Financial Management Assignment |
Question 3
Delta Ltd wishes to calculate its current cost of capital for use as a discount rate in investment appraisal. The following financial information relates to Delta Ltd:
Financial Position statement extracts as of 31 December 2022 Buy Answer of This Assessment & Raise Your Grades
The ordinary shares of Delta Ltd have an ex-div market value of £4.70 per share and an ordinary dividend of £0.36 per share has just been paid. Ordinary dividends are expected to grow in the future by 4% per year.
The preference shares of Delta Ltd are not redeemable and have an ex-div market value of £0.40 per share.
The 7% bonds are redeemable at a 5% premium to their nominal value of £100 per bond and have an ex-interest market value of £104.50 per bond.
The bank loan has a variable interest rate that has averaged 4% per year in recent years.
Delta Ltd pays profit tax at an annual rate of 19% per year.
Required:
a) Calculate the market value Weighted Average Cost of Capital (WACC) of Delta Ltd.
b) Discuss the pros and cons of using the WACC as a discount rate to evaluate capital budgeting projects.
c) Explain the impact of tax on the WACC according to the modified Modigliani & Miller (M&M II, 1963) capital structure model.
Do You Need Assignment of This Question
Need assignment help for your Financial Management course at Arden University (AU), UK? Look no further! Our expert team specializes in providing top-notch Thesis Writing services UK and is ready to assist you with your FIN6003 Financial Management Assignment.
Specifically tailored for AU students, our services cover a range of subjects, including the complex task of calculating the current cost of capital for investment appraisal, as required by FIN6003. Trust us to enhance your academic journey with reliable and personalized support. Pay our skilled professionals to excel in your studies at Arden University.
Answer
Do You Need Assignment of This Question
