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Calculate the weighted average cost of capital (WACC) for the...

Calculate the weighted average cost of capital (WACC) for the following different scenarios:

A. Jamson Enterprise has 2 million shares in issue. The current market price is 10 per share. The company's debt is publicly traded on the Paris Stock Exchange and the most recent quote for its price was at 90% of face value. The debt has a total face value of 10 million and Jamson Enterprise's credit risk premium is currently 2%. The risk-free rate is 3% and the equity market risk premium is 5%. The company's beta is estimated at 1.4 and its corporate tax rate is 40%. Calculate Jamson Enterprise's WACC.

B. Lulia Apparel plc has an average market cost of borrowing of 7% per year and an equity beta of 1.2. Lulia Apparel has a consistent ratio of debt to equity of 2:1 and a tax rate of 30%. The expected return on the market portfolio is 15% and the expected risk-free rate is 4%. Calculate the WACC for Lulia Apparel plc.