QUESTION B2 Mori PLC has in issue 1,000 bonds which mature in 4 years' time. The bond's par value is 1,000 each and it pays 8% interest per year. The cost of debt is 9% The company has just paid a dividend of 1.2 per share. Dividends are expected to grow at 4% for a foreseeable future. The company has 1 million shares outstanding, at nominal value of 1 per share. The cost of equity is 14% The marginal tax rate is 35%. Required: a) Estimate the total market value of the bonds in issue. b) Estimate the total market value of the outstanding shares. c) Calculate the weighted average cost of capital. 1