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Would appreciate a step by step answer to the above question. Berry Building Group plc is financed through bonds and ordinary shares. The bonds were

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Would appreciate a step by step answer to the above question.

Berry Building Group plc is financed through bonds and ordinary shares. The bonds were issued five years ago at a par value of 100 (total funds raised 4.5m ). They carry an annual coupon of 10 per cent, are due to be redeemed in four years and are currently trading at 106. The corporate tax rate is 20 per cent. Berry Building Group plc has a net asset figure of 3.5m showing on its balance sheet. The company's shares have a market value of 4m, the government securities risk free rate is 6 per cent and the additional risk premium for an average-risk share has been 5 percent. Berry Building Group's shares have a lower than average risk and its historic beta is 0.87 . (a) Calculate the cost of debt capital. (5 marks) (b) Calculate the cost of equity capital. (5 marks) (c) Calculate the weighted average cost of capital (WACC). (5 marks) (d) Discuss briefly whether Berry Building Group plc should use the WACC for all future projects (5 marks) (e) Discuss how capital structure influences a company's cost of capital

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