Using the table below and the given market values of every form of capital, calculate the weighted average cost of capital (WACC) for Agro Finance Company using your answers from the previous question. (5) Market value as Weighting as Cost as Weighted cost Capital rand value e.g R1 two decimal percentage eg as figure e.g source 000 000 points e.g 0.20 10.50% 4.45 Ordinary shares Preference shares Debt Total value A. As per CAPM cost of shares = Rf + beta *(Rm - Rf Rf = risk free rate Rm= return on market so cost of ordinary shares = 7.25% + 1*(12.20% - 7.25%) =12.20% B. Cost of preference shares = dividend/current price dividend= 5*10%=0.5 so cost of preference shares = 0.5 5.5 = 9.09% C. Cost of debt = YTM Given, coupon 120*12%=14.40 Current value = 120*(1+10%)=132 Cost of debt = (coupon / current price)*(1-tax) =(14.40 / 132) * (1-28%) = 7.85