Caplan Publishing has 10 million R1.00 ordinary shares in issue that have a current market value of R2.00 per share. The company also has non-redeemable loan capital in issue with a nominal value of R20 million that is quoted at R150 per R100 nominal value. The cost of ordinary shares is estimated at 15% and the rate of interest on the loan capital is 12%. The rate of corporation tax is 28%