Question: What are the calculations for a & b Question 2 (Weighted Average Cost of Capital (WACC) [10 marks] Makhekhe (Proprietary) Limited is financed as follows:

What are the calculations for a & b
Question 2 (Weighted Average Cost of Capital (WACC) [10 marks] Makhekhe (Proprietary)

Question 2 (Weighted Average Cost of Capital (WACC) [10 marks] Makhekhe (Proprietary) Limited is financed as follows: Type of Capital 250 million ordinary shares 1 800 000, 18% debentures Total Value of the Company The followinq was established from the company Current Market Values RI 600 OOO OOO OOO R2 400 0000 1 The management is convinced that the organ isation is financed optimally, and that the ratio of the financing components will remain constant in the future 2 The current cost of the various financing components, after taxation is 28%, is as follows: Cost of equity for Ordinary Shares ( 20%) Cost debt (after tax) for Debentures (15%) Requ i red Calculate the Weighted Average Cost Of Capital (WACC) Of Makhekhe (Pty) Ltd by: a. using the mathematical formula b. Completing the WACC table Round off your weights, cost of capital and final answer to 2 decimal places.

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