myregent.ac.za QUESTION FOUR [20] ZeebeeDee Ltd has the following capital structure: Equity 2 000 000 R2 ordinary shares, market price R2,50 Preference 1 000 000 12% R1 preference shares, market price R1,50 Reserves R1 500 000 Bank loan R500 000 15% bank loan Debentures R1 750 000 16% debentures, market price R150 (issued at R100) The current and expected future rate of ordinary share dividend is 20% with no growth. Tax rate is 30%. Required: 4.1. Calculate the weighted average cost of capital using the Dividend Growth Model. (15) 4.2. If the entity requires a further R500 000, identify and explain which option they will use to finance this amount