Question 2 [12 Marks] You have been presented with following information from SPex Company. Source of Capital Book Value Market Value After-tax cost Long-term debts 12 480 000 7 800 000 8% Preference shares 124 800 187 200 12% Ordinary shares 3 276 000 9 360 000 17% Total 15 880 800 17 347 200 SPex Company has an average tax rate of 28% Required: a) Calculate the WACC based on the book value weights. (10 marks) Use the below format to present your answer in a tabular form. Type of Capital Book Value Weight Cost (%) Weighted cost (%) b) Compare the book value and market value method of calculating the WACC above. (2 mark)