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The Kay Company has the following Capital structure as at 31st March, 2019.                              &nbs

The Kay Company has the following Capital structure as at 31st March, 2019.

                                    Based on Book Value Based on Market Value             % Costs

            Debentures                300,000                                     330,000                7                 

            Preference                  100,000                                    110,000                9

            Equity                     1,500,000                                   1,700,000            15

            Debt                           200,000                                    180,000              10

            Required :

            Determine the Weighted Average cost of capital using :

  1. Book Value weights, include formula used.     
  2. Market Value weights, include formula used.
  3. What are the factors affecting Cost of Capital, minimum 150 words, explain each factor?                                                  

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jeff jeffy answered 5 months ago
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