Begin by preheating your oven to 350°F (175°C). Grease and flour a 9x13-inch baking sheet pan to prevent sticking.
In a large mixing bowl, whisk together the all-purpose flour, granulated sugar, baking powder, and salt until well combined. Incorporate the shredded coconut, ensuring it is evenly distributed throughout the dry mixture.
In another bowl, combine the coconut milk, vegetable oil, eggs, lime zest, fresh lime juice, and vanilla extract. Whisk these ingredients together until the mixture is smooth and fully blended.
Gradually pour the wet ingredients into the dry ingredients, gently mixing with a spatula or wooden spoon until just combined. Be careful not to over-mix; the batter should remain slightly lumpy with no dry pockets.
Carefully pour the batter into the prepared baking pan, spreading it out evenly with a spatula.
Bake in the preheated oven for 25-30 minutes. Check for doneness by inserting a toothpick into the center of the cake; it should come out clean when the cake is ready.
While the cake is baking, prepare the frosting. In a mixing bowl, beat the softened unsalted butter with an electric mixer until creamy. Gradually add the sifted powdered sugar, coconut milk, and fresh lime juice, mixing until the frosting is light, fluffy, and smooth in texture.
Once the cake is fully baked, remove it from the oven and allow it to cool completely in the pan on a wire rack. This will help the cake set properly before frosting.
After the cake has cooled, spread the luscious lime coconut frosting evenly over the top, ensuring a generous layer for a burst of flavor in every bite.
To finish, sprinkle extra shredded coconut over the frosting, adding a delightful texture and lovely presentation.
Notes
For an extra touch, garnish each slice with a small lime wedge or a sprig of mint.