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Weighted Average Cost of Capital or Overall Cost of Capital (in Hindi)
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What an amazing lecture :) You crystal cleared all concepts :)
very well explained lectures mam,as they cover my all doubts,thnku vry much mam🤗🤗🤗🤗🤗
excellent Mam nd thank u so much
ma'am pls HRM and marketing pe bhi aise hi video bna dijiye
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1. Cost of Capital By Heena Malhotra

2. Cost of Capital Cost of Retained Cost and Weight Earning Cost of Combination of Cost of Equity Cost of Debt Preference Share of each sources of Capital Weighted Average Cost of Capital (WACC) By Heena Malhotra

3. The steps to calculate WACC is as follows: Step 1: Calculate the total capital from all the sources. (i.e. Long term debt capital + Pref. Share Capital +Equity Share Capital + Retained Earnings) Step 2: Calculate the proportion (or %) of each source of capital to the total capital Equity Share Capital (for example) Total Capital (as calculated in Step 1 above) l. . Step 3: Multiply the proportion as calculated in Step 2 above with the respective cost of capital. (ie. Ke Proportion (%) of equity share capital (for example) calculated in Step 2 above) Step 4: Aggregate the cost of capital as calculated in Step 3 above. This is the WACC (i.e. Ke + Ka Kp+ K, as calculated in Step 3 above) By Heena Malhotra

4. capital Component | Cost of | %oftotal capital! Total | | | | apital 10% (K) 11%(K) 9% (K) 696K) structure 25% (W) 10%M) 15%(W) 50% (W) | | Retained Earnings Equity Share Capital Preference Share Capital Long term debts Total (WACC) 12.50% (KrxW) 11.10%(Kxwj | 1.35%(Kn W | 300%(KAM | 7.95% By Heena Malhotra

5. Calculate the WACC using the following data by using (a) Book value weights (b) Market value weights The capital structure of the company is as under: Debentures 100 per debenture) Preference shares 100 per share) Equity shares 10 per share) 5,00,00o 5,00,000 10,00,000 20,00,000 The market prices of these securities are Debentures Preference shares 110 per preference share Equity shares Additional information 105 per debenture 24 each 100 per debenture redeemable at par, 10% coupon rate, 4% floatation costs, 10 year maturity (2) 100 per preference share redeemable at par, 5% coupon rate, 2% floatation cost and 10 year maturity (3) Equity shares has 4 floatation cost and market price 24 per share The next year expected dividend is 1 with annual growth of 5%. The firm has practice of paying all earnings in the form of dividend Corporate tax rate is 50%

6. 1 +0.05-0.1 or 10% Cost of Equity (K) +9= 24-74 = Po -F RV-NP 100 NP 10(1-0.5)+ Cost of Debt (K) - RV +NP RV +NP (100-96) 10 10(1 0.5) + 50.4 Cost of debt (K = 0.055 (approx.) (10096) 2 2 ! )-0.053(app 5.2 Cost of preference shares-k, = CostofP reference shares 198 By Heena Malhotra

7. (a) Calculation of WACC using book value weights Source of capital Book Value Weights After tax cost WACC (K of capital 0.055 0.10 b) (c (a)x(b) 10% Debentures Equity shares WACC (K) 5,00,000 025 5% Preference shares | 5,00,000 | 0.25 0,00,000 0.50 20,00,000 1.00 0.0137 0.0132 0.0500 0.0769 0.053 0.0769 or 7.6996 By Heena Malhotra

8. (b) Calculation of WACC using market value weights Source of capital Market Weights After tax WACC (K) Value cost of capital 10% Debentures ( 105x 5,000) | 525,000| 0.151 | 0.055 5% Preference shares( 110x 5,000)|550,000 | 0.158 | 0.053 24,00,000 0.6910.10 0.008 0.008 0.069 0.085 Equity shares R24x 1,00,000) 34,75,000 1.000 WACC (K) 0.085 or 8.5% By Heena Malhotra