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Goodhope Ltd currently has total capital of Tshs 200 million composed as follows: SOURCE AMOUNT 20% Long-term bank loan | 80 Million 10% Preference shares

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Goodhope Ltd currently has total capital of Tshs 200 million composed as follows: SOURCE AMOUNT 20% Long-term bank loan | 80 Million 10% Preference shares Common Shares Accumulated Reserves 30 Million 70 Goodhope Ltd has just paid a shs 50 dividend and its shares are selling at shs 220 per share. The dividend is expected to grow at 6% per annum indefinitely and Goodhope is in the the 30% tax bracket. i) Determine the individual cost of capital for each source of funds. ii) Determine the minimum rate of return that Goodhope must generate from its Investments financed by the above sources

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