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Nthanda PLC is an international food retailing company financed by both debt and equity capital. The current price of their stock is quoted on LuSE

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Nthanda PLC is an international food retailing company financed by both debt and equity capital. The current price of their stock is quoted on LuSE K120 cum-Div with a par value of k100. It has a total of 1,0000,000 shares outstanding. The company has recently paid a total dividend of K4 million to its shareholders. This is in line with the company's policy of increasing dividends by 5% per annum. Nthanda has an equity beta value of 1.86 . The yield on short-term government debt is 7% and equity risk premium is 7.4%. Nthanda PLC has K50, 000 9\% irredeemable preference shares in issue with a nominal value of each share of K100. They are currently quoted at K72 ex-dividend in the market. In addition, the company has issued K12.6 million of 8% redeemable in 5 years bonds. They are currently quoted at K80, ex interest. Corporate tax currently stands at 35%. Required: A. Calculate the cost of: (i) Equity using the DVM (3 Marks) (ii) Equity using the Capital Asset Pricing Model (CAPM) (3 Marks) (iii) Nthanda's Preference shares (2 Marks) (iv) Nthanda's frredeemable bonds (2 Marks)

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