Mapanyaza Securities Limited provide security services to both the industrial and residential sectors$.$ Its

services include provision of security personnel, transportation of cash, and installation of security

cameras, among other things. The company is listed on the Johannesburg Stock Exchange and has a

$31$ March financial year$-$end. You work at a financial advisory firm and have been provided with the

following information relating to Mapanyaza Securities Limited for the year ended $31$ March $2024$:

Market value of debentures R$?$

Long$-$term loans R$14000000$

Number of issued ordinary shares $1000000$

Share price R$15$

Earnings before interest and tax R$6000000$

Cost of equity $?$

Cost of debt $?$

Additional information:

$1.$ The company issued $500000$ redeemable debentures at a nominal value of R$10$ each. The

debentures are redeemable at nominal value in five years$$ time. The debentures bear $12\%$ interest

$($coupon rate$)$ per annum, whereas the market return for similar debentures is $10\%.$

$2.$ The long$-$term loan bears interest at $13\%$ per annum. Interest and the capital amount are repayable

annually in arrears over the next five years. The current JIBAR rate used for similar loans is $11\%.$

$3.$ The company has $10$ million authorised shares of which $1$ million have been issued. The dividend

paid to ordinary shareholders for the year ended $31$ March $2024$ was R$2$ per share. The expected

growth rate is $6\%$ per year for the foreseeable future.

$4.$ Assume that the current company taxation rate is $28\%.$

REQUIRED:

For each question below, remember to:

$$ Clearly show all the formulas used;

$$ Clearly show all your detailed calculations; and

$$ Round percentages to two decimal places and final answers to the nearest rand.

$($a$)$ Calculate the current market value of the debentures of Mapanyaza Securities Limited.

Use the mathematical formula, showing the formula and detailed substitution OR use the

financial calculator showing all detailed inputs.

$(6)$

$($b$)$ Calculate the cost of equity of Mapanyaza Securities Limited, using the dividend growth model. $(5)$

$($c$)$ Calculate the market value $($market capitalisation$)$ of Mapanyaza Securities Limited$$s issued

ordinary shares. $(2)$

$($d$)$ Calculate the weighted average cost of capital $($WACC$)$ of Mapanyaza Securities Limited for

the year ended $31$ March $2024.$

$(9)$