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Reference is made to the $2022$ Balance Sheet of Tram$-$Ropes limited$.$

Tram$-$Ropes Limited

Balance Sheet $2022$

Cash

$1,000,000\mathrm{.}00$ Accounts Payable

$8,000,000\mathrm{.}00$

Acc.

Receivable

$12,000,000\mathrm{.}00$ Notes Payable

$8,500,000\mathrm{.}00$

Marketable

securities

$3,000,000\mathrm{.}00$ Long$-$term Debt

$20,000,000\mathrm{.}00$

Inventories

$7,500,000\mathrm{.}00$ Common stock

$7,500,000\mathrm{.}00$

Fixed Assets

$26,500,000\mathrm{.}00$ Preferred Stock $6,000,000\mathrm{.}00$

Total Assets

$50,000,000\mathrm{.}00$

Total

Liabilities and

Equity

$50,000,000\mathrm{.}00$

Additional Information:

i$.$ The Long$-$Term debt consists of $8\%$ annual coupon bonds, with

$15$ years to maturity and are currently selling for $95\%$ of

par.

ii$.$ The company$$s common shares which have a book value of $$20$

per share are currently selling at $$25$ per share.

iii. Preferred shares have a book value of $$100$ per share. These

shares are currently selling at $$120$ per share and pays

dividends of $6\%$ per annum on book value.

iv$.$ The dividend growth rate is expected to be $3\%,$ and dividend

for $2023$ is projected to be $$5\mathrm{.}00$ per share.

v$.$ The Company$$s Tax rate is $30\%.$

Required:

Determine the following for Tram$-$Ropes Limited:

A$.$ Total Market value of the firm$$s capital structure

$(3$ marks$)$

B$.$ After$-$tax Cost of Debt

$(2$ marks$)$

C$.$ Cost of Common Stock

$(2$ marks$)$

D$.$ Cost of Preferred Stock

$(1$ mark$)$

E$.$ WACC $(2$ marks

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