question archive Qs1) Calculate the cost of capital of Larsen & Toubro Limited company based on publicly available information
Qs1) Calculate the cost of capital of Larsen & Toubro Limited company based on publicly available information
Subject:FinancePrice: Bought3
Qs1) Calculate the cost of capital of Larsen & Toubro Limited company based on publicly available information.
? Take cost of equity as 1.06
? For the risk-free return use the yield on 10 year Govt bonds i.e. 7.59%
? Assume the market return at 15
% ? If any other method is used for calculating the cost of equity, make assumptions accordingly. Explain the method used in brief e.g. earnings growth method etc.
? Calculate the cost of debt from the financial statements (Interest / total debt) (ensure you calculate the average value of debt, i.e. the average of the current year in consideration and the previous financial year)
? Calculate the tax rate (Tax / PBT)
