11. (i) The equity shares of a company is currently (i.e. at the end of 2015) selling in the market at `300 (F.V. is `100 each). It is known that the company has paid a dividend of `30 in 2014 and it has a steady growth rate of 4% per year. Find its cost of equity.

(ii) The capital structure of a company is given below:

Equity share capital (5,000 shares of `100 each) `5,00,000 10% Preference share (2,000 shares of `100 each `2,00,000 12% Debentures `3,00,000

`10,00,000 The operating profit is `2,90,000. The market price of each equity shares is `250 and of each preference share is `125.

Find the cost of each source of capital assuming

(a) Corporate tax to be 30% and

(b) Corporate dividend tax to be 10%.