1 Set. (B) Answer the followings (a) An ordinary share selling at a current market price of Rs. 120, and paying a current dividend (D0) of Rs. 9 per share, which is expected to grow at a rate of 8 %. Compute after-tax cost of capital assuming 40% tax rate. [5 Marks] (b) A 10-year 8% Rs. 1,000 bond is issued at Rs. 950, and will be redeemed at Rs.1,050. Compute after-tax cost of capital assuming 40% tax rate. [5 Marks]