Question 10
Seagull plc has 20 million $0·50 ordinary shares and irredeemable loan capital with a nominal value of $40 million in issue. The ordinary shares have a current market value of $2·40 per share and the loan capital is quoted at $80 per $100 nominal value. The cost of ordinary shares is estimated at 11% and the cost of loan capital is calculated to be 8%. The rate of corporation tax is 25%.
What is the weighted average cost of capital for Seagull plc?
Select an option, then click Submit answer.
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7·0%
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9·0%
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9·5%
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9·8%
