1. Investigate and calculate the cost of equity of the target company Wescoal Mining limited?

- estimate the beta of the company (Wescoal), making use of gearing and ungearing betas in reference to Exxaro resources beta? Risk free rate of return (Rf) is 7.98% and Market Return is 10.79% . Exxaro Beta is 1.08

STATEMENT OF FINANCIAL POSITION (GROUP) As at 31 March 2017 2016 in Rands ( (R'000) ASSETS Non eurrent assets Investment property Property, plant and equipment 209 496 350 3 637 22 664 11 366 4 372 641 198 Intangble assets Prepaid royality 542 9 533 36 654 12 Oeher receivable 2 021 6 739 818 273 1 272 631 121 Prepaid royalty 57 668 280 647 84 411 Trade and other recevables Cash and cash equivalent Restricned cash 16 01 179 73 584 Non-cument assets held-forsale 773 534 1 591 857 388 848 1019 969 EQUITY AND LIABILITIES Equity attributable to equity holders of parent Share capital Share-based payment reserve Retained income 8 676 175 734 684 632 213 156 263 64 642 385 061 Total equity Non-current liabilities Instalset sale agreements Other financial liabilities Delerred tax 2 907 19 306 46 186 18 533 85 932 21 77 918 Current Iliabilities Cutrent tax pyable Instalment sale agreements Other financial labliies 27 585 2 856 13 486 2 355 1019 9365 35 13 890 272 578 215 286 15 781 Tade and other payables Interest-bearing borrowing Bank overdraft 21 16 254 121 17 098 629 307 47 976 1 591 g 969 Total equity and liabilities 2 WESCOAL Integrated report for the year ended 31 Marth 201