Sharesb cost capitalcalculate the cost equity capital using the capital asset pricing model the cost debt capital assume taxation rate calculate the weighted average cost capital wacc using the share price dec for the value equity dividend growth modelbasing your calculations the dividend for
Analyse the implications of theories regarding the cost of capital.
Information for Tasks 1 and 2
| Other information: | |||||
|---|---|---|---|---|---|
| Nominal value per share (£) | 0.035 | 0.035 | 0.250 | 0.250 | |
| No. of Shares (Million) | 82.9 | 82.9 | 1,624.7 | 1,623.0 | |
| Earnings per share (pence) | 76.6 | 29.3 | 30.2 | 34.9 | |
| Dividends per share (pence) | nil | nil | 23.3 | 18.4 | |
| Share price at year end (pence) | 5,667.0 | 4,530.0 | 334.6 | 410.4 | |
| Value of equity (£m) | 4,695.5 | 3,753.4 | 5,436.2 | 6,660.8 | |
| Price earnings ratio | 74.0 | 154.6 | 11.1 | 11.8 | |
| Average p/e ratio for sector | 17 | ||||
| Share price 30 November 2017 (pence) | 6,069.0 | 313.2 | |||
| Equity value at 30 November 2017 (£m) | 5,028.6 | 5,088.6 |
| Notes on the above information: | |||||||||
|---|---|---|---|---|---|---|---|---|---|
These have been reviewed for the most recent year and it is thought the figures should be adjusted follows: |
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The Capital Asset Pricing Model
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The relative share price movements of the two companies are below:
