Question: calculation - The current risk-free rate is 7,25%, while the current market portfolio return is 12,2%. The company's beta is 1 . - The redeemable

calculation

- The current risk-free rate is 7,25%, while the current market portfolio return is 12,2%. The company's beta is 1 . - The redeemable preference share capital was issued at R5 per share and is redeemable in four years' time at par value. An annual 10% dividend is paid at the end of each of the four years. The shares are currently trading at R5,50 per share. - The 12% bonds are non-redeemable, with a par value of R120, and are currently trading at a 10% premium. - The company tax rate is assumed to be 28%. REQUIRED: Calculate the cost of: (a) Ordinary shares (b) Preference shares (c) Debt

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