1- A firm needs to raise fund of $1000'000 using the following sources, Bonds of $200'000 Bank loan of $200'000, common stocks of $400'000, retained earnings $200'000. Compute the cost of this capital based on the following information, Interest rates on bonds 7%, interest on bank loans 8%, Tax rate 40%, earning growth 5%, Dividends on common stocks 1$, price of stock $15 and floatation cost 2%, risk free rate 4%, market return 7%, beta of the stock 80%