Rssing Uraniums (RU) operations consist of two distinct activities: the first is mining uranium-bearing rock, while the second is processing this ore into uranium oxide for the worlds nuclear energy market, which fuels the generation of electricity. RU undertook a project involving the construction of a seawater desalination plant near Swakopmund. The project was completed on 01 January 2019 at a cost of N$10 000 000. After 5 years, the company has an obligation to dismantle and restore the environment in compliance with the Ministry of Environment & Tourism regulations. Management of RU have established that the cost of dismantling and restoration of the environment was N$4 000 000 on 1 January 2019. RU would want to evaluate several investment opportunities as well as to understand the overall risk of their assets as perceived by the market. Accordingly, the directors have set out to calculate the weighted average cost of capital (WACC) for the company. The assets of the company are currently financed by equity, bonds and preference shares. The details are as follows: Debt: The company issued 10 000 bonds that are currently outstanding with a 6% annual coupon rate. The bonds mature in eight years and have a N$1 000 face value. These bonds are currently trading in the market for N$1 100. Preference shares: The company also has in issue 3% Preference shares with a par value of N$100 each amounting to 100 000 shares. These preference shares are perpetual shares that are not redeemable at any time. The preference shares are currently selling for N$30 per share in the market. Equity: The company has 500 000 shares currently selling for N$25 each in the market. The shares have a beta of 1.5. The risk-free rate is 4%, and the expected market return is 12%. Recently, the company paid a dividend of N$2.32 per share and management expect that the growth in dividends will be 6% per share, forever. Tax rate is 20%.

1. Calculate the cost of the companys preference shares to 1 decimal place (e.g. 0.2).

2.Determine the cost of equity using the Dividend Growth Model to 4 decimal places

3. Calculate the Weighted Average Cost of Capital in percentage to 2 decimal places using the CAPM for the cost of equity to 4 decimal places (e.g. 13.25)

4.Estimate the pre-tax cost of debt to 3 decimal places (e.g. 0.2531)

5. Determine the cost of equity using the Capital Asset Pricing Model to 2 decimal places (e.g. 0.25)

6.Estimate the after-tax cost of debt to 4 decimal places (e.g. 0.2531)

7.Determine the total market value of the company