2. 2. As a financial analyst of a large electronics company, you are require to determine the weighted average cost of capital of the company using Book value weights. The following information is available for your perusal: Securities are traded in the The company's present book values OMR capital market. of capital structure is: Recent prices are: Preference shares (OMR 10 per share) 200,000 OMR 12 per share Equity Shares (OMR 10 per share) 1,000,000 OMR 22 per share Debentures (OMR 100 per debenture) 800,000 OMR 110 per Debenture Assume that the corporate tax rate is 35%. Anticipated external financing opportunities are: OMR 100 per debenture redeemable at par; 10 year maturity, 13% coupon rate, 4% flotation costs, sale price OMR 100. OMR 10 preference share, 14% dividend rate, 5% flotation costs, sale price OMR 15 Equity shares of OMR 2 per share flotation costs, sale price OMR 22. In addition, the dividend expected on the equity share at end of the year is OMR2 and the dividends are expected to increase by 7% p.a. The firm has a policy of paying all its earnings in the form of dividends