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please help me with this, it is very difficult REQUIRED Use the information provided below to answer the following questions: 4.1 Calculate the weighted average
please help me with this, it is very difficult
REQUIRED Use the information provided below to answer the following questions: 4.1 Calculate the weighted average cost of capital (calculations expressed to two decimal places, where applicable). (16 marks) 4.2 Calculate the cost of equity using the Gordon Growth Model (expressed to two decimal places). (4 marks) INFORMATION Capri Limited intends raising finance for a proposed new project. The financial manager has provided the following information to determine the present cost of capital to the company: The capital structure consists of the following: 2 million ordinary shares issued at R2 each but currently trading at R3 each. The company's beta coefficient is 1.4 . The risk-free rate is 9%. The return on the market is 17%. 1 million 12\%, R2 preference shares with a market value of R3 per share. R1 00000020% Bank loan, due in January 2026. Additional information The Capital Asset Pricing Model is used to determine the cost of equity. A dividend growth of 10% per annum on ordinary shares was maintained over the past five years. The latest dividend paid was 80 cents per share. Assume that the company tax rate is 28%Step by Step Solution
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