Question 4 (16 Marks) 4.1 (4 marks) You are given the following information of Apex Limited a local manufacturer Rate of return on RSA bonds : 9% Market rate of return: 13% Required; Using the CAPM model, calculate the cost of ordinary shares of Trefoil Limited with a beta coefficient of 1.45. 4.2 (12 marks) You have been presented with following information from Apex Company. Source of Capital Book Value Market Value Before-tax cost Long-term debts 16 848 000 7 800 000 8% Preference shares 169 728 187 200 11% Ordinary shares 4 455 360 9 360 000 18% Apex Company has an average tax rate of 28% Required: a) Calculate the WACC based on the book value weights. (10 marks) HEMN330-1-JulDec2021-SA1-GC-V3-27102021 7 b) Compare the book value and market value method of calculating the WACC above. (2 marks)