DATA ANALYSIS

Working and calculations :

1. Cost of Equity (Ke) = Dividend +Growth Rate
(Market Price- Floatation cost)

2. Market Price = Share holders Fund
No. of Shares

3. Dividend = Amount available for dividend
No. of Shares

4. Floatation cost = Issue of Expenses
No. of Shares

5. Growth rate = Current year sales – previous year sales x 100
Previous year sales

6. Cost of debts (Kd) = Interest (1-tax) + Redeemable value- Net proceed
No. of years
(Redeemable value + Net proceed )
2
7. Weighted Average cost of capital = Products x 100
Amount

8. Economic Value Added = Net operating profit after tax – (Capital x Weighted
Average cost of capital)

9. Reserve and surplus = Interest (1- tax) (1-Before tax)
Market price
2006

1. Cost of Equity (Ke) = 2 + 5%
(46.70-.005)

= 2 + 5%
46.695

= 9.28%

2. Market Price = 775515000+284555554
775515000

= 3621070562
775515000

= 46.70

3. Dividend = 155103000
775515000

= 2.00


4. Floatation cost = 350500
775515000

= 0.005

5. Growth Rate = 51186145188- 4968818150 x 100
4968818150

= 5 %

6. Cost of Debts (Kd) = 110000 (1- 0.3366) + (1000000- 994444)
6
(1000000+994444)
2
= 7.41%
(ii) Kd = 105000 (1- 0.3366) + (1000000- 994444)
7
(1000000+994444)
2
= 7.06%

iii . Unsecured Loan = 4%

iv . Reserve and Surplus = 9.28%

Weighted Average Cost of Capital (WACC)

Particular Amount Cost of Capital Product
Equity 775515000 9.28% 71967792
Debenture 133333200 7.41% 9879990.12
Debenture 114285800 7.06% 8068577.48
Reserve and surplus 2845555564 9.28% 264067556.3
Unsecured Loans 132904368 4% 5316174.72
4001593932 359300090.60

Weighted Average cost of Capital = 359300090.60 x 100
4001593932

= 9%
Net Profit After tax = 948045103
Add: Interest: - Term Loan = 331834
- Debenture = 32270963
980647900
Economic value Added
= 980647900- (4001593932 x 9%)
= 980647900 – 360143453.80
= 620504446.20
2005

1. Cost of Equity (Ke) = 2.06 + 11%
(37.86-0.005)

= 2.06 + 11%
37.856

= 9.28%

2. Market Price = 75280212+284555554
75280212

= 2849881657
75280212

= 37.86

3. Dividend = 155103000
75280212

= 2.06


4. Floatation cost = 350500
75280212
= 0.005

5. Growth Rate = 51186145188- 4968818150 x 100
4968818150

= 5 %

6. Cost of Debts (Kd) = 110000 (1- 0.3659) + (1000000- 994444)
6
(1000000+994444)
2
= 7.09%
(ii) Kd = 105000 (1- 0.3656) + (1000000- 994444)
7
(1000000+994444)
2
= 6.76%

iii . Unsecured Loan = 4%

iv . Reserve and Surplus = 20.44%