A) A company has issued 7% convertible bonds which are due to be redeemed in eight years time. They are currently quoted at K107= per K100 nominal. The bonds can be converted into 20 shares in six years time. The share price is currently K6= and is expected to grow at a rate of 6% per year. Assume a 30% rate of tax. Required: Calculate the cost of convertible debt for the company above. (8marks) B) The following is the extract from the balance sheet for Mporokoso PLC. Balance sheet as at 30 June 2018 Dividend Below is a record of dividend payments in the last 5 years The current ( 1 July 2018) market value of Mporokoso PLC ordinary share is K3. 27 per share cum div. An annual dividend of 810000= is due for payment shortly. The A) A company has issued 7% convertible bonds which are due to be redeemed in eight years time. They are currently quoted at K107= per K100 nominal. The bonds can be converted into 20 shares in six years time. The share price is currently K6= and is expected to grow at a rate of 6% per year. Assume a 30% rate of tax. Required: Calculate the cost of convertible debt for the company above. (8marks) B) The following is the extract from the balance sheet for Mporokoso PLC. Balance sheet as at 30 June 2018 Dividend Below is a record of dividend payments in the last 5 years The current ( 1 July 2018) market value of Mporokoso PLC ordinary share is K3. 27 per share cum div. An annual dividend of 810000= is due for payment shortly. The