You have been appointed as a financial consultant by the directors of Mario Limited. They require you to calculate the cost of capital of the company, The following information is available on the capital structure of the company: 5 500 000 Ordinary shares, with a market price of R3 per share. The beta of the company is 1.6, a risk- free rate of 8.2% and the return on the market is 18%. There are One million 12%, R1 Preference shares with a market value of R2 per share. In addition, R2 200 000 8%, Debentures due in 8 years and the current yield-to-maturity is 11% and R5 000 000 13% Bank loan, due in December 2027 Additional information: The company has a tax rate of 30%. The latest dividend declared was 90 cents per share. A dividend growth of 13% was maintained for the past 5 years. Required: 1.1 Calculate the weighted average cost of capital (WACC). Use the Capital Asset Pricing Model to calculate the cost of equity. (22 Marks) (3 Marks) 1.2 Calculate the cost of equity, using the Gordon Growth Model. QUESTION TWO Westside Traders normal credit terms to East-Rand Manufacturers are 60 days but is prepared to allow a 4% rebate if it pays the account within 30 days. Calculate the cost to East-Rand Manufacturers of not accepting the discount