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| Listed companies Given below are extracts from the annual accounts of four listed companies, together with information concerning their stock market performance. Companies A and B are from the brewing sector and have as their principal business activities, brewing beer, wholesale and retail selling of beers, wines and spirits and soft drinks and the ownership and management of public houses. The principal activities of companies C and D are the distribution and service of electronic components, icroprocessor systems and related equipment.Company D is also involved in the manufacture of steel products such as partitions and lintels.  The pre-tax cost of debt for the companies that have long term loans is 12%. The bonds for Company A are undated and are currently trading at $80 per $100 nominal. Assume that Company A issued the bonds one year ago to finance a new investment.Required (a) Using the dividend valuation model, calculate the weighted average cost of capital for each of the four companies, assuming a tax rate of 45% and ignoring bank overdrafts. (12 marks) |