$2\mathrm{.}4$

REQUIRED

Use the information provided below to calculate the weighted average cost of capital $($expressed as a percentage to two decimal places$).$

$(5$ marks$)$

INFORMATION

The optimal capital share of Yolo Limited is $60\%$ ordinary share, $10\%$ preference share and $30\%$ debt financing. The pre$-$tax costs of capital for ordinary shares, preference shares and debt are $18\%,15\%$ and $20\%$ respectively. The tax rate is $27\%.$