QUESTION ONE COST OF CAPITAL Mackson limited capital structure at the year just ended (31st march 2021) was as follows 6,000,000 ordinary shares of Ksh 8 par." 5,000,000 12.5% preference shares of Ksh 8 par. 45,000 bonds of Ksh 1000, 12% Irredeemable debentures. 50,000 bonds of Ksh 1000, 10% redeemable bonds. Ksh 800,000,000 Retained earnings Additional information is provided as follows a. Ordinary shares are currently selling at Ksh 25 each while preference shares are trading at Ksh 10 each. Preference shares are redeemable in the next two years at par value and pay dividend at end of the year b. The company has reported earnings before interest and tax of Ksh 74,480,000 - c. The company's growth rate is 3%, pays corporate taxes at 30% and has a dividend pay out of 40% of earnings available to equity holders. d. Irredeemable bonds are trading at 120 while redeemable ones at 96. Redeemable bonds have 3 more years remaining and will be redeemed at 1. par. They pay interest annually. e. f. The company reported earnings before interest and tax of ksh 48 millions. Required: a) Compute the cost of carious components of Jackson's capital structure b) compute weighted average cost of capital of the company. QUESTION ONE COST OF CAPITAL Mackson limited capital structure at the year just ended (31st march 2021) was as follows 6,000,000 ordinary shares of Ksh 8 par." 5,000,000 12.5% preference shares of Ksh 8 par. 45,000 bonds of Ksh 1000, 12% Irredeemable debentures. 50,000 bonds of Ksh 1000, 10% redeemable bonds. Ksh 800,000,000 Retained earnings Additional information is provided as follows a. Ordinary shares are currently selling at Ksh 25 each while preference shares are trading at Ksh 10 each. Preference shares are redeemable in the next two years at par value and pay dividend at end of the year b. The company has reported earnings before interest and tax of Ksh 74,480,000 - c. The company's growth rate is 3%, pays corporate taxes at 30% and has a dividend pay out of 40% of earnings available to equity holders. d. Irredeemable bonds are trading at 120 while redeemable ones at 96. Redeemable bonds have 3 more years remaining and will be redeemed at 1. par. They pay interest annually. e. f. The company reported earnings before interest and tax of ksh 48 millions. Required: a) Compute the cost of carious components of Jackson's capital structure b) compute weighted average cost of capital of the company