A Study on Cost of Capital of Royal Roots Company, Madurai, Tamil Nadu State, India

The cost of capital is important in the financial management of every business. A measure of the cost of capital is required when evaluating various aspects of strategic business plans. The purpose of this research is to study the financial position of Royal Roots Company with respect to its cost of capital. This research includes the analysis of cost of capital of the company and its ability to finance its business. Interview and questionnaire were used for methods of data collection and SPSS analysis was used to analyze the questionnaire. The analysis includes the financial years from 2010 to 2013. The analysis is carried out with the help of ratio analysis, regression analysis and trend analysis. This research also includes projections of weighted average cost of capital for the next 5 financial years. It also includes how the company can increase the profit in the coming years with proper management of capital structure.