S PLC is a multinational company operating across various countries. The company holds a range of project portfolios and intends to expand its operations into new countries with a set of new investments over the next five years. The management of S Plc has provided you with the following information on the sources of finance for the company.

'000

Ordinary Shares 22,560 6% Preference Shares 5,640

10% bonds 16,920

Bank loan 5,640

50,760

S PLCs ordinary shares have a nominal value of 0.40 per share, the current price on the stock market is 7.33. The equity beta for S PLC is 0.9. The irredeemable preference shares have a nominal value of 0.80, the current market price is 0.88 per share. The 10% bonds have a nominal value of 100 per bond and a market value of 110 per bond. The fixed before tax interest rate for Clive Plcs bank loan is 6% per annum. The yield on UK treasury bills is 3% and the equity risk premium is 6% per annum. The corporation tax for S PLC is 25%.

a) Calculate the weighted average cost of capital for S Plc based on market values.

b) Discuss the benefits of listing on the financial markets for a multinational company like S PLC.