You have been appointed as a financial consultant by the directors of Kandy Holdings. They require you to calculate the cost of capital of the company.

The following information is available on the capital structure of the company:

1 500 000 Ordinary shares, with a market price of R3.50 per share. The latest dividend declared was

90 cents per share. A dividend growth of 13% was maintained for the past 5 years.

1 000 000 12%, R1 Preference shares with a market value of R2 per share.

R1 000 000 9%, Debentures due in 7 years and the current yield-to-maturity is 10%.

R900 000 14% Bank loan, due in December 2022.