elvet (Pty) Ltd has the following capital structure:

of

Equity:

R1,50 per share.

10 000 000 R1 ordinary shares. The market price is currently

Preference shares: 4 000 000 @ R0,45 yielding 10%. The market price is currently R0,50 per share.

Debentures:

R2 000 000, 20% debentures, issued at R1,00. The market

price is currently R1,08 per debenture.

Bank Loan:

R5 000 000 11,67% FNB bank loan.

Assuming the following rate of return is expected for each type of capital:

Equity

16,5%

Preference shares 10,1%

Debentures

9,65%

Loans

8,4%

Assume a tax rate of 28%.

Calculate the cost of capital using the weighted average cost of capitanWACC)