PrinecGee Photography's financial year starts on December I every yeur, as at av ivovemice sube- K000 K'000 Non-curtent Axsets - . ++15,350 Curmen Asets - - - - - - - 5,900 Credisors filling due within one year +(2,600) Net Current Asets - _ - _ _ - - - - - 3,300 Toul Net Astets 10.650 Ordinaty Share Capital (K25 shares) - . . . . . - - -2.000 7% Preference Shares (KI shares) Share Premum Account - _ _ _ _ - - - - 1,100 Retained Earnings 6,550 Total Financinit 10.650 Assunc Carvates The current prece of the ordinary shares is K135 cum-dividends. The dividend of K10 is payable dering the next few days. The expected nate of growth of the dividend is 9% per annum. The current price of the preference sfoures is K.77 and the dividend has mecently been natd. The foan notes interest has also been paid recently and the loan notes afe currently trading at K80 per K100 nominal. Assume that PrinceCGe Photography issued the toan notesrone year ago to Finance a new investment. Compiny tax is at the rate of 35%, Required: i. Calculate the gearing ration for Princedee using: a. Book Values (5 Marks) b. Market Values (5 Marks) ii. Caleulate the PrinceGee's Weighted Average Cost of Capital (WACC), usiag the respective Market Values as weightsing factors, (10 Mlarks) ii. In less than half a page explait how the capital assets pricing model would be used as an altermative method of estimating the cost cf equity, indicafing what information would be required and how it would be obtained. ( 5 Marks) PrinecGee Photography's financial year starts on December I every yeur, as at av ivovemice sube- K000 K'000 Non-curtent Axsets - . ++15,350 Curmen Asets - - - - - - - 5,900 Credisors filling due within one year +(2,600) Net Current Asets - _ - _ _ - - - - - 3,300 Toul Net Astets 10.650 Ordinaty Share Capital (K25 shares) - . . . . . - - -2.000 7% Preference Shares (KI shares) Share Premum Account - _ _ _ _ - - - - 1,100 Retained Earnings 6,550 Total Financinit 10.650 Assunc Carvates The current prece of the ordinary shares is K135 cum-dividends. The dividend of K10 is payable dering the next few days. The expected nate of growth of the dividend is 9% per annum. The current price of the preference sfoures is K.77 and the dividend has mecently been natd. The foan notes interest has also been paid recently and the loan notes afe currently trading at K80 per K100 nominal. Assume that PrinceCGe Photography issued the toan notesrone year ago to Finance a new investment. Compiny tax is at the rate of 35%, Required: i. Calculate the gearing ration for Princedee using: a. Book Values (5 Marks) b. Market Values (5 Marks) ii. Caleulate the PrinceGee's Weighted Average Cost of Capital (WACC), usiag the respective Market Values as weightsing factors, (10 Mlarks) ii. In less than half a page explait how the capital assets pricing model would be used as an altermative method of estimating the cost cf equity, indicafing what information would be required and how it would be obtained. ( 5 Marks)