[chiokezie]

Good afternoon sir, from the p4 June 2013 question on Milma, please help me in determining Ziwa cost of capital.

here is the question:
Mlima co’s closest competitor is ziwa co, a listed company which mines metals worldwide. Mlimaco’s directors are of the opinion that after listing Mlima co’s cost of captial should be based on ziwa co’s ungeared cost of equity. Ziwa co’s cost of captial is estimated at 9.4%, its geared cost of equity is estimated at 16.83% and its pre-tax cost of debt is estimated at 4.76%. these costs are based on a captial structure comprising of 200 million shares, trading at $7 each, and $1700 million 5% irredeemable bonds trading at $105 per $100. both Ziwa and Mlima co pay tax at an annual rate of 25% on their taxable proficts.

please help me with the ungeared cost of Equity (Ke) in this question

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