Rossini plc is identical in all operating and risk characteristics to Wagner plc, except in terms of capital structure: Rossini plc is financed by equity, whereas Wagner plc is financed by a mixture of debt and equity. The market values of Wagner plcs equity and debt are 2.1m and 0.9m, respectively. To service its debt, Wagner pays 72,000 p.a., and the company pays an annual dividend of 378,000. Rossini plc pays a dividend of 450,000 p.a. Required:

(a) Calculate the market value of Rossini plc.

(b) Calculate the cost of capital for Rossini plc.

(c) Calculate the cost of equity for Wagner plc

(d) Calculate the cost of debt for Wagner plc,

(e) Calculate the weighted average cost of capital for Wagner plc

(f) In a world where debt tax relief is available at 30%, calculate the weighted average cost of capital for Wagner plc.