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Please assist in answering all questions below That is the information for answer those questions QUESTION 2 (22 marks) The following extract from the statement
Please assist in answering all questions below
That is the information for answer those questions
QUESTION 2 (22 marks) The following extract from the statement of financial position of GREENPOWER Limited are given to you: Additional information: - The ordinary shares have a nominal value of R25 per share. The current market value per share is R67. - The current dividend paid to shareholders was R6,70 and the expected growth rate is 6,5% per annum. - The debentures have a face value of R4 500 per debenture and are redeemable after eight years at face value. - The current market return for similar debentures with a life of eight years is 12% before tax. - The agreement of the long-term loan provides that interest is charged at 9% per annum. The current JIBAR rate for similar loans is 11% (after tax). - The current tax rate for companies is 28%. REQUIRED: a) Clearly identify the different types of funding (equity or debt) and calculate the capital structure of GREENPOWER Limited. b) Calculate the market value of equity for GREENPOWER Limited. c) Calculate the cost of equity by using the Dividend Growth model. d) Calculate the after-tax cost of the debentures. e) Calculate the current market value of debentures. You may use either the mathematical formula or the financial calculator. Show the formula used (mathematical formula) as well as detailed calculations or all the financial calculator inputs. (Round your final answer to the nearest rand). 4 MAC2602/A02/S2/2022 f) Calculate the weighted average cost of capital (WACC) of GREENPOWER Limited. You can use either the mathematical formula or the table format. Show your detailed calculations and round your final answer to two decimal places. Set your calculator on four decimal places for the calculations of this question and round your final answers to two decimal places. Show the formulas used and detailed calculations. [22]Step by Step Solution
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