REQUIRED

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

percentage to two decimal places$).$

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 $27\%.$QUESTION $2$

$2\mathrm{.}1$

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.

INFORMATION

The credit terms granted by Mega Manufacturers to Sibiya Stores are $\frac{3}{10}$ net $60$ days.

$2\mathrm{.}2$

REQUIRED

Use the information given below to calculate the following:

$2\mathrm{.}2\mathrm{.}1$ Economic Order Quantity

$2\mathrm{.}2\mathrm{.}2$ Re$-$order point.

INFORMATION

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

$2\mathrm{.}3$

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.

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$.$