Bellville Glassware (BG) finances its operations with debt and common share, where debt constitute 40% of the capital structure.
Analyst believe that the company will grow at an annual constant rate of 10% per annum. The annual yield on the company debt is
rd = 10% and the companys tax rate is T = 30%. The BGs common stock trades at P0 = R55 per share, and its current dividend of
D0 = R5 per share is expected to grow at a constant rate of g = 10% a year
Estimate BGs weighted average cost of capital