Section Answer TWO (02) questions only Question No. 03 4. Coli flower is a listed holding company engaged in manufacturing preserved food and located in heart of country. Given below are few extracts from the financial reports of the company 2019 Rs re 50,000,000 25,000,000 5,000,000 Petit C Equities Ordinary shares (Rs. 10 per share) 6% Preference shares (Rs. 10 per share) Retained camings Noncurrent liabilities 7% Convertible bonds 9% Loan notes Net assets per share Earnings per share Dividend per share (D) 10,000,000 5,000,000 19 prett Asian 4,75 Brident 4.90 1.90 Additional information i. Ordinary shares have a nominal value of Rs. 10 per share and the fair value is Rs. 10.90 per share (cum dividend) ii. Fair value of preference shares are Rs. 12 per share and these preference shares are irredeemable iii. Nominal value of convertible bonds is Rs. 100 and the fair value is Rs. 125. Maturity period of these bonds are five years and at the maturity bonds can be converted into 15 ordinary shares of every bond. The current ordinary share price is expected to grow at the rate of 3% per year. iv Loan notes are irredeemable and have a nominal value of Rs. 100 per loan note. The fair value of note is Rs. 120. V. Corporate tax rate is 30% 8/12 792 0.02 Required: 1. Calculate the cost of equity, preference shares, convertible bands and loan notes. (12 marks) 2. Calculate the weighted average cost of capital (04 marks)