Weighted Average Cost of Capital (WACC)

Particular Amount Cost of Capital Product
Equity 75280212 20.44% 158515266
Debenture 16666600 7.09% 11816661.94
Debenture 142857200 6.76% 9657146.72
Reserve and surplus 2074366657 20.44% 424000544.56
Unsecured Loans 169008864 4% 6760354.56
3378414321 613749973.70

Weighted Average cost of Capital = 613749973.70 x 100
3378414321

= 18%
Net Profit After tax = 948045103
Add: Interest: - Term Loan = 331834
- Debenture = 32270963
980647900
Economic value Added
= 831344812- (3378414321 x 18%)
= 831344812– 608114577.70
= 223230234.30
2004

1. Cost of Equity (Ke) = 2. + 11%
(33.40-0.005)

= 2 + 11%
33.395

= 17%

2. Market Price = 2252637880
67441500

= 33.40

3. Dividend = 134883000
67441500

= 2



4. Growth Rate = 51186145188- 4968818150 x 100
4968818150

= 5 %

5. Cost of Debts (Kd) = 110000 (1- 0.3570) + (1000000- 994444)
6
(1000000+994444)
2
= 7.20%
(ii) Kd = 105000 (1- 0.3570) + (1000000- 994444)
7
(1000000+994444)
2
= 6.85%

iii . Unsecured Loan = 4%

iv . Reserve and Surplus = 17%

Weighted Average Cost of Capital (WACC)

Particular Amount Cost of Capital Product
Equity 674415000 17% 114650550
Debenture 200000000 7.20% 14400000
Debenture 171428572 6.85% 11742857.18
Reserve and surplus 1477122880 17% 251110889.60
Unsecured Loans 191634198 4% 47665367.92
3764600650 442584664.60

Weighted Average cost of Capital = 442584664.60 x 100
3764600650

= 11.76%
Net Profit After tax = 948045103
Add: Interest: - Term Loan = 331834
- Debenture = 32270963
980647900
Economic value Added
= 338158975- (3364600650 x 11.76%)
= 338158975-442717036.40
= (104557061.40)
2003

1. Cost of Equity (Ke) = .54 + 14%
(32.44-.005)

= .54 + 14%
32.435

= 15.66%

2. Market Price = 2018352508
62227085

= 32.44

3. Dividend = 33720750
62227085

= 0.54



5. Growth Rate = 51186145188- 4968818150 x 100
4968818150

= 5 %

6. Cost of Debts (Kd) = 110000 (1- 0.3675) + (1000000- 994444)
6
(1000000+994444)
2
= 7.00%
(ii) Kd = 105000 (1- 0.3675) + (1000000- 994444)
7
(1000000+994444)
2
= 6.74%

iii . Unsecured Loan = 4%

iv . Reserve and Surplus = 15.66%

Weighted Average Cost of Capital (WACC)

Particular Amount Cost of Capital Product
Equity 674415000 15.66% 105613389
Debenture 200000000 7.00% 14000000
Debenture 200000000 6.74% 13480000
Reserve and surplus 1343937508 15.66% 210460613.70
Secured Loan 156960179 6% 9417610.74
Unsecured Loans 1269992064 4% 50799682.56
3895304751 406771295.90

Weighted Average cost of Capital = 406771295.90 x 100
3895304751

= 10.44%
Net Profit After tax = 948045103
Add: Interest: - Term Loan = 331834
- Debenture = 32270963
980647900
Economic value Added
= 263922265- (3895304751 x 10.44%)
= 263922265– 406669816
= (142747551)