Question: 4 (20 Marks) REQUIRED Use the information provided below to answer the following questions: 4.1 Calculate the weighted average cost of capital (calculations expressed to
4 (20 Marks) REQUIRED Use the information provided below to answer the following questions: 4.1 Calculate the weighted average cost of capital (calculations expressed to two decimal places, where applicable). (16 marks) 4.2 Calculate the cost of equity using the Gordon Growth Model (expressed to two decimal places). (4 marks) INFORMATION Capri Limited intends raising finance for a proposed new project. The financial manager has provided the following information to determine the present cost of capital to the company: The capital structure consists of the following: 2 million ordinary shares issued at R2 each but currently trading at R3 each. The companys beta coefficient is 1.4. The risk-free rate is 9%. The return on the market is 17%
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