- BTEC Unit 4: Leadership and Management Assignment Brief 1 2025-26, City of London College
- Culinary Arts Management (chef) Assignment Social Science Research Proposal , University College Birmingham (UCB)
- Unit 4002 Engineering Mathematics (A/651/0708) Assignment Brief 2025-2026, Barnsley College (BC)
- Nutrient Diploma Course Assessment 2025-26, The College of Naturopathic Medicine
- Unit 3 Management of Human Resources Pearson BTEC Diploma Assignment Brief 2025-2026 – Lyceum Campus UK
- NAM4034 Fundamental skills for Nursing Written Care Plan CW1 Assignment Brief Academic Year 2025-26, Buckinghamshire New University (BNU)
- Unit 5006 Further Mathematics – Pearson BTEC Level 5 Diploma Assignment 2025-2026, Leeds City College
- BIT4213 Fundamental of Cryptography Individual Assignment 1 – Understanding Cryptographic Techniques
- WNI077 Nutrition and Digestion Graded Assignment 2 Brief : Access to HE Diploma – Health and Social Care
- FDY3003 Exploring the Social World Assignment Essay – Arden University UK
- Mechanical Engineering Assessment: Design and Development of an Aerodynamics Package
- 7CO04 Business Research in People Practice Learner Assessment Brief
- Fundamentals of Chemistry Assignment Brief Workbook Task 1 and Task 2
- Managing Information System Assignment – A Case Study on Amazon
- Unit 5 Furniture and Accessories in Interior Design Assignment – National Design Academy
- 6ENT2030 Geotechnical Design Assignment Brief – University of Hertfordshire
- Network and Security Assignment Project Report for Global Enterprises
- Unit 5011 Industrial Power Electronics and Storage Pearson BTEC Level 5 Assignment Brief
- NU7020 Leadership and Quality Improvement and Governance Assignment – Trinity College Dublin (TCD)
- BTEC Level 3 Business Unit 4: Managing an Event – Assessment Brief
FIN6003 Delta Ltd wishes to calculate its current cost of capital for use as a discount rate in investment appraisal: Financial Management Assignment, AU, UK
| University | Arden University (AU) |
| Subject | FIN6003 Financial Management Assignment |
Question 3
Delta Ltd wishes to calculate its current cost of capital for use as a discount rate in investment appraisal. The following financial information relates to Delta Ltd:
Financial Position statement extracts as at 31 December 2022 Are You Looking for Answer of This Assignment or Essay
The ordinary shares of Delta Ltd have an ex-div market value of £4.70 per share and an ordinary dividend of £0.36 per share has just been paid. Ordinary dividends are expected to grow in the future by 4% per year.
The preference shares of Delta Ltd are not redeemable and have an ex-div market value of £0.40 per share.
The 7% bonds are redeemable at a 5% premium to their nominal value of £100 per bond and have an ex-interest market value of £104.50 per bond.
The bank loan has a variable interest rate that has averaged 4% per year in recent years.
Delta Ltd pays profit tax at an annual rate of 19% per year.
Required:
a) Calculate the market value Weighted Average Cost of Capital (WACC) of Delta Ltd.
b) Discuss the pros and cons of using the WACC as a discount rate to evaluate capital budgeting projects.
c) Explain the impact of tax on the WACC according to the modified Modigliani & Miller (M&M II, 1963) capital structure model.
Are You Looking for Answer of This Assignment or Essay
Elevate your academic experience with our tailored support – Assignment Helper UK and specialized Finance Assignment Help Services in the UK. Crafted for students at Arden University (AU), our expertise extends to Financial Management, focusing on the intricacies of FIN6003.
Explore the challenge faced by Delta Ltd as they aim to calculate their current cost of capital for use as a discount rate in investment appraisal. UK students seeking guidance can invest in their academic success by leveraging our expert assistance. Simplify financial complexities, ensure excellence, and advance confidently in your coursework with our dedicated support.
Answer
