3 Bronx plc has Ghs 10million 25p ordinary shares in issue with a current price of 115p cum div. annual dividend of 9p has just been proposed. The company earns ROE of 10 percent and pays out 40 percent of the earnings as dividend. Bronx ple also has 13pecent irredeemable loan notes with a BV of ghs7million trading at par. They are due to be redeemed at par in five years time. If the rate of tax is 33percent compute the wacc.

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