The following is the capital structure of XYZ Ltd as on 31-12-2011 Kshs '000' Equity share...

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The following is the capital structure of XYZ Ltd as on 31-12-2011 Kshs '000' Equity share :10,000 share of kshs 100 each 10,000 10% preference shares (of kshs 100 each) 12% Debentures 4,000 6,000 20,000 i) The market price of the company's share is kshs 100 and it is expected that a dividend that a dividend of kshs 10 per share would be declare for the year 2011. The dividend growth rate is 6% Required: If the company is in the 50% tax bracket, compute the weighted average cost of capital (10mks) The following is the capital structure of XYZ Ltd as on 31-12-2011 Kshs '000' Equity share :10,000 share of kshs 100 each 10,000 10% preference shares (of kshs 100 each) 12% Debentures 4,000 6,000 20,000 i) The market price of the company's share is kshs 100 and it is expected that a dividend that a dividend of kshs 10 per share would be declare for the year 2011. The dividend growth rate is 6% Required: If the company is in the 50% tax bracket, compute the weighted average cost of capital (10mks)

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