Calculate the weighted average cost of capital for the company Holidays R Us. The information we have on this company is the following, mainly from the financial accounts as at 30 June 2021:

• The balance sheet shows that the authorised capital for the company consists of 1 million shares at par value $0.50 per share. Only 800,000 shares have been issued.

• The company's only debt consists of debentures. These are shown on the balance sheet as 15,000 11% debentures with par value of $100. Maturing in 10 years.

• Holidays R Us pays tax at 28%. The companys Treasury department has provided the following current market data:

• The shares are currently trading at $2.5/share. The last dividend was $0.11 and the dividend is expected to grow by 4.5% pa indefinitely.

• The debentures could be re-issued into the current debt market at 12.5% per annum. The current market value of the debentures was not provided, so use the interest payments to estimate it.

Use the bond price formula to calculate the current value of the debentures.