Gymogae (Pty) Limited (Gymogae) is a multi-national conglomerate. Gymagoe is in the process of calculating their WACC rate for the 2020 financial year and has complied the following information:

Ordinary Shares

Dividend declared for 2020 R250 000.

The dividend yield of Gymogae is estimated to be 11%. There are 100 000 ordinary shares in issue.

Preference Shares

These are 10% preference shares convertible into ordinary shares in 2022. The offer for conversion is one ordinary share for every four preference shares held.

It is estimated that these preference shares have a market rate of 18%.

The book value of the preference shares is R4million and the price per preference share is R5.

Debentures

These debentures are non-convertible and non-redeemable. The debentures current yield to maturity is 20%.

The market value of the debentures is R14million.

Additional Information:

• Extract from the statement of comprehensive income:

	2019	2018	2017
	R	R	R
Profit after tax	650 000	601 800	557 200

• The tax rate is 28%.

Calculate the Weighted Average Cost of Capital (WACC) of Gymogae Ltd. (25)