This business is planning to pay an ordinary dividend at

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P limited provided the following information

Contributed Capital                                                                $

100,000 ordinary shares                                             100,000

50,000 (14% preference shares                                    50,000

NON-Current Liabilities                                 

16% Debentures (face value$100)                               60,000          

18%Mortgage                                                              42,400

Market Prices are given as fallows:

Ordinaryshares                                                           $1.50

Preferenceshares                                                        $1.12

Debentures                                                                 $86.00

This business is planning to pay an ordinary dividend at the endof the year of 18 cents, which is expected to grow at 5% per annum.The company rate of tax is 30%. Calculate the weighted cost of capital (WACC) (Show all working)

Reference no: EM13614222

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