The management team at Widget, plc, a fast growing manufacturing company, is discussing the benefits and disadvantages of getting a listing in a foreign exchange rate, as it continues to seek expansion. Below is an extract from Widget plcs Statement of Financial Position: 000 Share capital (0.50 ordinary shares) 50,000 Reserves 70,000 5% Irredemable bond 25,000 8% Debenture (maturity at 2014) 27,000 9.5% Bank loan 18,000 Total 190,000 ======== In order to decide whether the international listing would lead to an increase in value for Widget, plc, the finance manager is trying to calculate the companys current cost of capital and has collected the following additional information: Current market prices are 2.75 for the ordinary shares, 50p for the irredeemable bond, and 60p for the debenture. 7 Historically in the market, the risk premium is 7%, the beta for Widget, plc is 1.35 and currently treasury bonds interest rate is 5.5%. The current corporation tax rate is 25%. Required Compute the current weighted average cost of capital (WACC) of ABC Plc. State clearly any assumptions made.