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Question The Management of Shonongo Plc are currently the cost of capital to use for investment the current time: OUESTE one challenge. The challenge is how to estimate The following Information relates to the company at Detalls Number of ordinary shares Book value of 9% convertible debt Book value of 8% bank loan Market price of ordinary shares Market value of convertible debt Amounts 25 million ZMW38 million ZMW3 million ZMW6.3 per share ZMW108.2 per ZMW100 bond Shonongo Plc has an equity beta of 1.3 and the equity risk premium is 8%. The government bond rate is 15%. The corporate tax is 25% per annum. Shonongo Plc expects share prices to rise in the future at an average rate of 5% per year. The convertible debt can be redeemed at par in eight yearstime or converted in five years' time into 15 shares of Shonongo Plc per ZMW100 bond. Regulred: (aCalculate the weighted average cost of capital of Waka Limited using market values as weights. State clearly any assumptions that you make. Disuneush between maximuzation of shareholder Women and maximization of profits as financial objectives of a listeu company such as Shonongo Plc. Question The Management of Shonongo Plc are currently the cost of capital to use for investment the current time: OUESTE one challenge. The challenge is how to estimate The following Information relates to the company at Detalls Number of ordinary shares Book value of 9% convertible debt Book value of 8% bank loan Market price of ordinary shares Market value of convertible debt Amounts 25 million ZMW38 million ZMW3 million ZMW6.3 per share ZMW108.2 per ZMW100 bond Shonongo Plc has an equity beta of 1.3 and the equity risk premium is 8%. The government bond rate is 15%. The corporate tax is 25% per annum. Shonongo Plc expects share prices to rise in the future at an average rate of 5% per year. The convertible debt can be redeemed at par in eight yearstime or converted in five years' time into 15 shares of Shonongo Plc per ZMW100 bond. Regulred: (aCalculate the weighted average cost of capital of Waka Limited using market values as weights. State clearly any assumptions that you make. Disuneush between maximuzation of shareholder Women and maximization of profits as financial objectives of a listeu company such as Shonongo Plc

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