Using the information above, fill in the WACC table provided to calculate the final WACC.

ICE Task 3 – WACC (Marks: 18)
You are the financial manager of Monsteria (Pty) Ltd (“Monsteria”), a company within the horticultural industry. Monsteria currently runs a very popular online store supplying indoor and outdoor plants to both corporate and private clients.

Monsteria has grown at an exponential rate and now wishes to raise funds for the building of their very first brick-and-mortar retail store which will offer the public an opportunity to shop in store for their plant needs.

In your capacity as financial manager, you will need to calculate the weighted average cost of capital (WACC) to assess the expected minimum return from the project. You have been provided with the following information.

The following is an extract from the statement of financial position as at 30 April 2022:
EQUITY AND LIABILITIES Notes R’000
Total Equity
Ordinary Shares 1 5 500
10% Preference Shares 2 800

Non-current liabilities
11.5% Long term loan 3 2 000
8% Debentures 4 6 000

Current Liabilities
Trade and other payables 500
Bank overdraft 5 1 000
Total Equity and Liabilities

Notes
Ordinary shares were initially issued at R6.40 per share. The shares currently have a market value of R7.80 per share. MonExt has a beta of 1.5, a risk-free rate of 8% and a market risk premium of 7%.
Three years ago, the preference shares were issued at R4 each. Similar preference shares are currently trading at 10%.
The long-term loan, issued on 30 April 2020, is repayable in full in five years’ time. The effective pre-tax cost of debt is 4% above prime.
The debentures were issued at the beginning of this current financial year (1 May 2021) and will be redeemed at a discount of 7% on 30 April 2025. The market rate for similar debentures is 8,5%.

Additional Information:
The current prime rate is 9.25%
The corporate taxation rate is 28%.

Required:
Using the information above, fill in the WACC table provided to calculate the final WACC.