A Limited has the following capital structure: 200,000 ordinary shares @ 5 1,000,000 100,000 15% preference shares @ 2 2,00,000 10,000 10% bond @ 100 1,000,000

. An ordinary share has a market price of shs 50 and is expected to pay dividend of Sh 8 one year from now and the dividends are expected to grow at 4% p.a indefinitely. Tax rate is given at 30%. Required ( a) The components cost of capital. (2mks) The component weight of each capital (2mks) WACC (4mks) Under working capital management, cash level management is key to achieving profitability. Explain the main uses of cash (2mks)