Cost of capital of AstraZeneca for 2015

sources

amount

Equity capital 5
Reserves and 145.76
surplus
total
150.76

weight
0.033
0.96

Cost of
capital
.20
.20

WACC
0.0066
0.192
0.1986

Ke=dividend/market price*100
=2/10*100
=20%
As no flotation cost so ke=kre

Cost of capital of AstraZeneca for 2014

sources

amount

Equity capital 5
Reserves and 166.60
surplus
total
171.60

weight
0.03
0.97

Cost of
capital
.20
.20

Ke=dividend/mp*100
=2/10*100
=20%
As no flotation cost so ke=kre

Cost of capital of AstraZeneca for 2013

WACC
0.006
0.194
0.2

sources

amount

Equity capital 5
Reserves and 94.75
surplus
total
99.75

weight
0.06
0.94

Cost of
capital
.20
.20

WACC
0.012
0.188
0.2

Ke=dividend/mp*100
=2/10*100
=20%
As no flotation cost so ke=kre

Cost of capital of AstraZeneca for 2012

sources

amount

Equity capital 5
Reserves and 184.29
surplus
total
189.29

weight
0.03
0.97

Cost of
capital
.20
.20

WACC
0.006
0.194
0.20

Ke=dividend/mp*100
=2/10*100
=20%
As no flotation cost so ke=kre

Cost of capital of AstraZeneca for 2011

sources

amount

Equity capital 5

weight
0.03

Cost of
capital
.20

WACC
0.006

Reserves and
surplus
total

174.69

0.97

179.69

.20

0.194
0.20

Ke=dividend/mp*100
=2/10*100
=20%
As no flotation cost so ke=kre

Cost of capital for cipla ltd

Cost of capital of Cipla ltd for year 2015
sources

amount

weight

WACC

0.012
0.876

Cost of
capital
0.18
0.18

Equity capital
Reserves and
surplus
Unsecured
loans
total

160.58
10920.59
1379.94

0.110

0.08

0.0088

12461.11

0.002
0.1576

0.1684

Ke=5/27.77*100
=18%
Ke=kre

Cost of capital of Cipla ltd for year 2014

sources

amount

Equity capital 160.58

Reserves and 9922.09

weight
0.014
0.905

Cost of
capital
0.18
0.18

WACC
0.00238
0.15385

surplus
Unsecured
loans
total

877.34

0.0800

0.08

10960.01

0.0064
0.16263

Ke=5/27.77*100
=18%
Ke=kre

Cost of capital of Cipla ltd for year 2013

sources

amount

weight

WACC

0.016
0.886

Cost of
capital
0.18
0.18

Equity capital
Reserves and
surplus
Unsecured
loans
total

160.58
8708.54
956.32

0.096

0.08

0.0076

9825.44

Ke=dividend/market price*100
=2/10*100
=20%
As no flotation cost so ke=kre

0.0028
0.1594

0.1698

Cost of capital of Cipla ltd for year 2012

sources

amount

weight

Cost of
capital
0.18
0.18

WACC

Equity capital
Reserves and
surplus
Unsecured
loans
total

160.58
7380.74

0.021
0.978

2.20

0.00029 0.08

0.00001

7543.52

0.179

0.003
0.176

Ke=dividend/market price*100
=2/10*100
=20%
As no flotation cost so ke=kre

Cost of capital of Cipla ltd for year 2011

sources

amount

weight

WACC

0.022
0.915

Cost of
capital
0.18
0.18

Equity capital
Reserves and
surplus
Unsecured
loans
total

160.58
6443.40
437.53

0.0623

0.08

0.0049

7041.51

Ke=dividend/mp*100
=2/10*100
=20%
As no flotation cost so ke=kre

0.0039
0.1647

0.179

As you can see from the following data that cost of

capital of CIPLA ltd is less as comparable to the
cost of capital of AstraZeneca and this is because
of Trading on equity as CIPLA ltd is using debt
along with equity and as we know that cost of debt
is less than n cost of equity that is the reason that
overall cost of capital of CIPLA is less as
comparable to cost of capital of AstraZeneca ltd
Whereas AstraZeneca ltd is only using equity
shares as a source of capital so they are not
getting the benefit of Trading on Equity so there
cost of capital is high