10 YEAR RISK FREE RATE: 2.59%

4 YEAR RISK FREE RATE: 2.045%

CREDIT SPREAD 45BP

Corporate Bonds The company's debt consists of corporate bonds with a face value of $2,000,000 The bonds mature in 4 years. They pay a semi-annual coupon at a coupon rate of 3.8% pa. Standard and Poor's have given the company a debt rating of AAA. % -3%") x 11 Preference Shares r- o.09 The company' has 700,000 preference shares on issue. The preference shares pay an annual dividend of $0.86. They are currently trading for a price of $9.17 0.96 9.38% Ordinary Shares The company' has 1,900,000 ordinary shares on issue. The ordinary shares have a beta of 1.9. The shares have just paid a dividend of $0.86. The dividend is expected to grow at a rate of 7% for the next 4 years, and after that it will grow at a constant rate of 2% pa. in perpetuity. The following data should be used in calculating the company's Weighted Average Cost of Capital Other Information The long term market risk premium is 8.1% pa