1. An entity has the following information in its statement of financial position. GH'000

Ordinary shares of 50Gp 2,500

12% unsecured bonds (issued @ par) 1,000

Recorded Dividend 0.60.

The ordinary shares are currently quoted at 130Gp each and the bonds are trading at 72 per 100 nominal. The ordinary dividend of 15Gp has just been paid with an expected growth rate of 10%. Corporation tax is currently 30%.

(a)Cal the WACC for this entity. (b)Cal alternative WACC for entity (clue: use book value)