3. X & Co. has issued 12% redeemable preference shares of face value `100 for `10 lakh.

The shares are expected to be sold at 5% discount; it will also involve flotation cost of `5 per share. The shares are redeemable at a premium of 5% after 10 years. Calculate the Cost of Capital of redeemable preference share if the rate of tax is 50%. Ignore dividend tax.