Accounting and Finance:

a) Explain the following with example: (i) Ordinary shares (ii) Preference shares (iii) Cost of capital (iv) Weighted average cost of capital (WACC)

b) Provide the advantages and disadvantages of both raising capital using ordinary shares and preference shares to a company.

c)

(c) You plan to open a supermarket and you got the following data from your accountant. Market Value (AUD) Cost % Loan from Town Bank 420,000 8.00 Preference shares 1,100,000 9.00 Ordinary shares 3,000,000 13.00 Calculate the Weighted average cost of capital (WACC) of this business