Dividend Yield Po F g Po*(1-f) ke kr

Cost of equity and reserve 2.10 236.20 0.1 5.00% 212.58 6.00% 5.88%

Analysis In the above table we calculated the cost of equity and cost of reserve capital of the DLF. we take the assumption that the flotation cost is 10% which we have used to calculate the cost of equity share capital and we have take the market price of the DLF share for the same process . We have taken 5% growth rate for equity because by method of arithmetic and geometric we found negative growth rate as now market environment has been changed so we take positive growth rate of latest year. For the calculation of cost of reserve we have just followed same procedure just not included flotation cost. Calculation of WACC Sources Equity borrowings reserves On the basis of Book Value Amount 3396.80 159551
141568.8

Proportion 0.01115472851069 5 0.52394844813057 8 0.46489682335872 7

Weighted cost 0.00066705276494 0.000366763913691 0.000273359332135 .001307

304,516.60 Sources Equity borrowings On the basis of Market Value Amount 4012.3 159551 163563.3 Proportion 0.02453056400794 1 0.97546943599205 9

Weighted cost 0.001466927727675 0.068282860519444 .069746

Analysis DLF weighted average cost of capital is approximately .13 per cent at book value weights and 6.9 per cent at market value weights. Its market value weighted cost is more than the book values weighted cost of capital. If DLF is considering an investment project of average risk then it can use 6.9 per cent as discount rate to compute the projects NPV.