In this file, I have discussed the cost of capital of Deewan housing finance ltd.

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COMPARISION OF DEWAN HOUSING FINANCE CORPORATION LTD.
WITH CREST VENTURES LTD.ON THE BASIS OF COST OF CAPITAL
BY TAKING LAST FIVE YEARS OF DATA.
COST OF CAPITAL
It is cost of obtaining money to fund asset purchase use as estimate of discount rate. Or The cost of
capital is the minimum required rate of earnings or the cut-off rate of expenditure.
ACCEPT PROJECT IF
 Actual return>cost of capital(r)
REJECT PROJECT IF
 Actual return<cost of capital(r)
These are the following types of cost of capital on which we can compare the Dewan housing finance Ltd.
and GIC housing finance Ltd.:-
1. Cost of debt (Kd).
2. Cost of equity (Ke).
3. Weighted average cost of capital (WACC).

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DEWAN HOUSING FINANCE CORPORATION VS CREST VENTURES LTD.
STOCK TREND OF FIVE YEAR
VS

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From the above graph and data I can say that Dewan housing finance corporation ltd is having good
performance as compared to the Crest venture Ltd .In the year 2013 Crest venture Ltd having 49.80
rupee/share market value of share and Dewan housing fiancé company had 80.25 rupee/share.If
compare whole of the data of these two company we can say that Dewan housing finance is large firm
as compared to the Crest venture Ltd.
FINANCIAL STRUCTURE ANALYSIS
Both these companies are a big housing giant in the markets. But the capital of dhfl is more than Crest
venture Ltd.In the present scenario,dynamic environment makes a company more efficient and effective
to work in this competitive world. Dhfl’s Cost of raising equity is more than Crest cost .Cost of debt of
dhfl's is also more than that of Crest venture ltd.DHFL’S cost is more because it has more capital than
crest venture ltd.
DHFL CAPITAL CLASSIFICATION
Issued and Paid-up Share Capital
(1) Equity
The Issued and paid up equity share capital of the Company as at March 31, 2017 was Rs.313.15 crore
divided into 31,31,52,205 equity shares of Rs.10/each as compared to Rs.291.80 crore divided into
29,17,97,988 equity shares of Rs.10/- each as at March 31, 2016. The increase was mainly on account of
issuance and allotment of following equity shares:
(a) 2,12,30,070 (Two crore Twelve lakh Thirty thousand and Seventy) equity shares of face value Rs.10/-
each to Wadhawan Global Capital Private Limited (WGCPL), a promoter group entity owing to
conversion of warrants allotted during the previous financial year, upon receipt of balance 75% of the
total consideration amount i.e. Rs.375 Crore as per the applicable provisions of Securities and Exchange
Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as amended and
applicable provisions of the Companies Act, 2013, including rules made thereunder.
(b) 1,24,147 equity shares of Rs.10/- each, upon exercise of options (employee stock appreciation rights)
by the eligible employees of the Company pursuant to Dewan Housing Finance Corporation Limited-
Employee Stock Appreciation Rights Plan 2015.
Your Company has neither issued any shares with differential voting rights nor any Sweat Equity shares,
during the financial year under review.
(2) Preference Share Capital
During the financial year under review, the Members of the Company on February 20, 2017, approved the
issuance of Non- Convertible Redeemable Cumulative Preference Shares amounting to Rs.750 crore
(including the premium amount of Rs.500 crore), by way of a special resolution passed through Postal
Ballot. However, no preference shares were issued by the Company, during the financial year 2016-17.
The share capital of crest venture ltd is 26.05.

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COST OF CAPITAL
Cost of capital refers to the opportunity cost of making a specific investment. It is the rate of return
that could have been earned by putting the same money into a different investment with equal risk.
Thus, the cost of capital is the rate of return required to persuade the investor to make a given
investment.
In comparison between these two companies DHFL shows the better cost of capital in comparison to
Crest Venture Ltd because DHFL gives more return than Crest Venture in every terms.
From the above data and facts we conclude that financial structure of a company plays a very vital role in
company's growth. If our capital structure is good means we appropriately allocate our equity and debt
then the chances of company's growth increases.
ANALYSIS COST OF DEBT OF DEWAN HOUSING FINANCE CORPORATION LTD.
VS CREST VENTURE LTD.
Data of cost of capital:-
From the analysis I have found that the cost of debt and the cost of equity of DHFL and CVLT
 DHFL is having l1% cost of debt and CVLT is having 12% in the year 2017.It means DHFL cost
of raising debt is lower than CVLT .This shows that the internal control applied in the
management is more effective and efficient in this year. The stakeholders shows trust in the
company because of the good credibility or reliability of the company. Means this company will
11rupee to raise its fund from the lenders for 100 rupee amount. As in comparison Crest company
require 12 rupee for raise their fund on 100rupee amount.
 In year 2016 both the operates effectively but in the terms of capital structure and equity
classification DHFL is more efficient. The value of cost of debt of DHFL is same 12%.
 In the year 2015 DHFL cost of raising debt is 12% in comparison to Crest Venture Ltd cost of
raising debt is 6%.This shows that DHFL is enable to meets the need of stakeholders. Who shows
the trust in the company.Crest company cost covering debt is more sound and effective.
 In the year 2015 DHFL cost of raising debt is 12% % in comparison to Crest Venture Ltd cost of
raising debt is 5 %.This shows that DHFL is enable to meets the need of stakeholders. Who shows
the trust in the company.Crest company cost covering debt is more sound and effective.
 In the year 2013 DHFL cost of raising debt is 23%.In comparison 8% of Crest venture.The
stakeholders don’t show the utmost faith in DHFL stake due to the poor financial performance and
inefficient repayment capacity.DHFL internal control is too weak the company should try to focus
on key strategic areas of the company.
Suggestion on the basis of cost of debt:-
 The should try to focus on the key strategic areas of the management including its financial sector.
 Company should must try to strengthen its core values of the management its related sector.

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Cost of equity analysis
 In the year 2013 DHFL cost of raising equity is 25.78% and Crest is 6% Crest internal
management is more effective than DHFL. Crest has a good sound in management structure
due to trustworthiness shown in the company.
 In the year 2014 DHFL’S cost of raising equity is 24.78% and Christ’s is 5.20% due to the
sound financial structure of DHFL it’cost become high.Crest has a moderate capital structure
due to this structure their cost become low.
 In the year 2015 DHFL’s cost of raising equity is is 24.78% and Christ’s is 5.20% due to the
sound financial structure of DHFL it’cost become high.Crest has a moderate capital structure
due to this structure their cost become low.
 In the year 2016 DHFL’S cost of equity is 24.78% in compare to 5.20% of Crest venture
ltd.DHFL’S management structure is poor as in equity analysis as compared to Crest venture
Ltd.
 In In the year 2017 cost of raising equity is 25.20% in compare to 6.08% of crest venture ltd.
DHFL’S consistency showed a better result. In the future both companies have good future.
DHFL’S company is having high cost of capital. Clearly means that 25.20% would be too
high because I’d lose money. But 6% would make sense (ignoring for the purpose of this
example the cost of my own time and labour)because I will be bringing in more than I am
paying.