The following figures have been extracted from the financial statements of MRT Ltd: > Book Value of Current Assets $35 million and Current Liabilities $29.25 million > Long-term Loan: $6.47 million > Retained Earnings: $22.50 million >9% Debentures: $28 million debentures issued at $1,000. > General Reserves $7.50 million > Preference Share Capital: 8.5 million shares issued at $3 per share > Ordinary Share Capital: 31 million shares issued at $1 per share The following additional information has been provided by the manager of the company: > Government bonds are currently yielding 5.8% per annum. > The current market return on equity is estimated to be 14.6% per annum. >A merchant banker suggests that MRT Ltd would have to offer a rate of 14.4%p.a. on any new issue of 15-year debentures. > Debenture coupons are paid semi-annually, with 15 years to maturity. > The company tax rate is 34%. > The loan requires 9% interest payment, compounded monthly. > 12% Preference shares of MRT Ltd are currently traded at $2.59 per share > MRT Ltd ordinary shares have recently traded at $3.79 and the company's financial manager believes that a beta of 2.1 is appropriate for the company. Requirement-B. Using your own words, explain any four relevant factors that can affect the cost of capital.