Question
use the following information provided to calculate the following expressed to two decimal places a. cost equity using capital asset pricing model b. cost preference
use the following information provided to calculate the following expressed to two decimal places a. cost equity using capital asset pricing model b. cost preference shares c. cost of debt d. Weighted average cost of capital e cost of equity using the Dividend Growth information the capital structure consists of the following: - 4 million ordinary shares shared at R4 each but currentely trading at R6 each - 3 million 12% R4 preference shares which incurred floatation costs of R0.16 per share - R4 000 000 15% Bank loan due in July 2007 additional information - the company s beta coefficient is 1.5 the rusk-free rate is 10% the return on the .arket is 25% a dividend growth of 10 % per annum on ordinary shares was maintained over the past 5 years. the divident paid was 150 cents per share. assume that the company tax rate is 28%
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