PLEASE ANSWER ONLY PARTS D & E

QUESTION A The following information is related to JT Company PLC (JT) as at 31st December 2018: Issued share capital of JT is $500 million and it comprises with 1,000,000 ordinary shares. JT is a quoted company and its current share price is $250. The dividend paid for the current year was $40 per share and growth rate of annual dividend payment is 5%. The retained earnings of JT were $ 100 million. JT has issued irredeemable preference shares for a value of $150 million. This consists of 500,000 preference shares and annual dividend per share is $25. The last traded price of a preference share was $250; and Irredeemable, non-quoted long-term borrowings of JT were $150 million with annual interest rate of 17%. The company pays income tax at the rate of 28% per annum on its profits. Compute the following: a) Cost of ordinary share capital; b) Cost of preference share capital; c) After-tax Cost of debt; d) Weighted average cost of capital (WACC)at market values; and e) Discuss why WACC may not be the best to use as a discounting factor in investment appraisals