QUESTION $2(20$ Marks$)$

$2\mathrm{.}1$

REQUIRED

Use the information provided below to determine the cost $($as a percentage, expressed to two decimal places$)$

to Sibiya Stores of not accepting the discount. Assume a $360-$day year.

$(4$ marks$)$

INFORMATION

The credit terms granted by Mega Manufacturers to Sibiya Stores are $3/10$ net $60$ days.

$2\mathrm{.}2$

REQUIRED

Use the information given below to calculate the following:

$2\mathrm{.}2\mathrm{.}1$ Economic Order Quantity $(4$ marks$)$

$2\mathrm{.}2\mathrm{.}2$ Re$-$order point. $(3$ marks$)$

INFORMATION

The following details have been supplied by Tonga Suppliers for the only product that it sells:

Sales per month $3000$ units

Carrying costs as a percentage of the unit purchase price $10\%$

Purchase price per unit R$50$

Cost of placing an order R$25$

The time that elapses between placing an order and the receipt of the products $12$ days

Number of days that Tonga Suppliers operates in a year $240$ days

$2\mathrm{.}3$

REQUIRED

Use the Dividend Growth Model to estimate the cost of the ordinary shares $($expressed as a percentage to

two decimal places$)$ from the information provided below.

$(4$ marks$)$

INFORMATION

The present value of a Torga Limited ordinary share is R$50,$ the dividend at the end of the previous year was

R$8$ and the expected growth rate in dividends is $10\%$ p$.$a$.$

$2\mathrm{.}4$

REQUIRED

Use the information provided below to calculate the weighted average cost of capital $($expressed as a

percentage to two decimal places$).$

$(5$ marks$)$

INFORMATION

The optimal capital share of Yolo Limited is $60\%$ ordinary share, $10\%$ preference share and $30\%$ debt

financing. The pre$-$tax costs of capital for ordinary shares, preference shares and debt are $18\%,15\%$ and

$20\%$ respectively. The tax rate is $27\%.$