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ADvTECH Limited $($ADT$)$ is a South African entity that operates within the private education and recruitment industries in South Africa and the rest of the African continent. ADT has had challenges with the repatriation of its profits from some of the countries it operates. Furthermore, ADT has reported losses due to the translation of different currencies to the South African rand. In addition, there is reported economic red tape in some of the African countries ADT operates. Since the COVID$-19$ breakout, the education industry has seen the mushrooming of online teaching and learning. The recruitment division performed dismally due to low employment opportunities. In South Africa, the education division has experienced rising student debt due to shrinking household disposable income. ADT is listed on the Johannesburg Stock Exchange and has a $31$st December financial year$-$end.

The following information regarding ADvTECH Ltd$$s $31$ December $2023$ financial position is available:

Share capital Additional information $1$

Debentures Additional information $2$

Long$-$term liabilities Additional information $3$

Additional information:

$1.$ ADT has $50000000$ ordinary shares in issue. The shares were issued at an average price of R$10$ rands per share, and the shares were trading at R$12$ each on $31$ December $2023.$ The dividend paid per share for the year ended $31$ December $2023$ was $80$ cents. The South African government bonds current yield is $10\%,$ Beta is estimated at $1,4,$ and the market risk premium is currently $8\%.$

$2.$ ADT issued $1000000$ debentures at a nominal value of R$200.$ The debentures are redeemable at nominal value in six years and pay an annual coupon of $10\%.$ The pre$-$tax market return on similar debentures is $8\%.$

$3.$ The long$-$term liabilities consist of the loan ADT has with Standaard Bank South Africa. The loan amount is R$300$ million and is repayable in full in five years. The loan bears interest at $11\%$ per annum and the current interest rate for similar loans is $12\%.$

$4.$ The current company taxation rate is $27\%.$

REQUIRED: For each question below, remember to:

$$ Clearly show all the formulas used;

$$ Clearly show all your detailed calculations; and

$$ Round percentages to two decimal places and final answers to the nearest rand.

$1.$ Identify and briefly discuss six $(6)$ factors that are eminent from the given scenario that ADT should consider that may affect its operations.

$2.$ Calculate the weighted average cost of capital $($WACC$)$ of ADT on $31$ December $2023.$

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