You have been appointed as a financial consultant by the directors of Baron Holdings. They require you to determine the cost of capital of the company. The following information is available on the capital structure of the company: 1500000 ordinary shares, with a market price of R3 per share. The latest dividend declared was 86 cents per share. A dividend growth of 15% was maintained for the past 5 years. 100000011%,R1 preference shares, with a market value of R3 per share. R1 0000009%, debentures due in 7 years and the current yield-to-maturity is 10%. Note that the current price of the debenture is R951 356 R700 000 14\%, bank loan, due in December 2021. Additional information: - The company has a tax rate of 30%. - The beta of the company is 1.7 , a risk free rate of 5% and the return on the market is 14%. Required: 2.1 Calculate the weighted average cost of capital. Use the Gordon Growth Model to calculate the cost of equity (22 marks 2.2 Calculate the cost of equity, using the Capital Asset Pricing Model. (3 marks Question 3 (25marks Call Enterprises produces a single product. The following budgeted information for 2024 financial year is available: I he number of units expected to be produced and sold durng 2024 is 30000 Answer each of the following questions independently. 3.1 Calculate the total contribution margin and operating profit (loss) if all 30000 units are sold. 3.2 Calculate the margin of safety (as a percentage) for 2024 (5 marks 3.3 Use the contribution margin ratio to calculate the sales value required to achieve an operating profit of R1200 000 . (6 marks 3.4 Suppose Callmore Enterprises is considering a R6 per unit decrease in the selling price of the product with the expectation that . (7marks this would increase the sales volume by 10%. Is this a good idea? Motivate your answer with the relevant calculations (7marks