The following information is related to JT Company PLC (JT) as at 31st December 2018: Issued share capital of JT is $500 million and it comprises with 1,000,000 ordinary shares. JT is a quoted company and its current share price is $250. The dividend paid for the current year was $40 per share and growth rate of annual dividend payment is 5%;

The retained earnings of JT were $100 million;

JT has issued irredeemable preference shares for a value of $150 million. This consists of 500,000 preference shares and annual dividend per share is $25. The last traded price of a preference share was $250.; and

Irredeemable, non-quoted long-term borrowings of JT were $150 million with annual interest rate of 17%. The company pays income tax at the rate of 28% per annum on its profits.

Compute the following: a) Cost of ordinary share capital; (7 marks)

b) Cost of preference share capital; (3 marks)

c) After-tax Cost of debt; (3 marks)

d) Weighted average cost of capital (WACC) at market values; and (7 marks)