Kreepy Kelvin Ltd (KKL) has a number of issues outstanding that contribute to its cost of capital. Kelvin presently has bonds on issue with a face value of $1000 that currently pay a coupon of $90 per year of $45 per payment. These bonds currently trade at par.

Last year KKL paid a dividend of $1 and it is expected to grow at a rate of 9% per annum. The current share price is $9.5. Beta for these shares is 1.1.

There is an outstanding preference share issue that pays a coupon of 7% per year. The face value of the these shares is $10 but they are currently trading at $9.7. The beta of these shares is 0.7. The debt to equity ratio is 0.7 while of the equity the percentage breakdown of market values is 40% preference and 60% ordinary shares. The corporate tax rate is 30%.