What would be the cost of debt share and retained earnings


Assume a project investment program worth $ 30 billion, for which the following financing program has been identified:

A four year, $ 15 billion bank loan with an interest rate of 26% nominal annual, payable quarterly advance.

Shares that will generate net proceeds of $ 8,000 million. The current price of the stock is $ 10,000 per share, while the dividend to be distributed in the next year, which will be paid at the end of the same, is $ 1,500 per share. The expenses are equivalent to 3% of the current price. Assume inflation for the next years of 15%.

Retained earnings of $ 7 billion.

What would be the cost of debt, share and retained earnings in percentage for this package?

Answer:

Cd: 20,05%

Cs: 31,61%

Cr: 31,15%

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Financial Management: What would be the cost of debt share and retained earnings
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