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  1. business
  2. accounting
  3. iv. has the following capital structure which it c

iv. has the following capital structure which it considers optimal: A. Determine the: i.ii.costofpreferredstock.iii.costofcommonstock.iv.weightedaveragecostofcapital.(4marks)(2marks)(2marks)(4marks) B....

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Accounting

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iv. has the following capital structure which it considers optimal: A. Determine the: i.ii.costofpreferredstock.iii.costofcommonstock.iv.weightedaveragecostofcapital.(4marks)(2marks)(2marks)(4marks) B. The firm has a beta of 1.4. The market return equals 12% and the risk-free rate of return is 7%. Determine the firm's cost of common equity using CAPM approach. (3 marks) C. Explain why cost of capital is measured on the after-tax basis. (3 marks) D. Why is using a weighted average cost of capital recommended rather than the cost of specific funds to determine a firm's cost of funds? (2 marks) iv. has the following capital structure which it considers optimal: A. Determine the: i.ii.costofpreferredstock.iii.costofcommonstock.iv.weightedaveragecostofcapital.(4marks)(2marks)(2marks)(4marks) B. The firm has a beta of 1.4. The market return equals 12% and the risk-free rate of return is 7%. Determine the firm's cost of common equity using CAPM approach. (3 marks) C. Explain why cost of capital is measured on the after-tax basis. (3 marks) D. Why is using a weighted average cost of capital recommended rather than the cost of specific funds to determine a firm's cost of funds? (2 marks)

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