[10 Marks] Sigma Auto Parts has the following capital structure. 6626 Capital Structure) Book Value (Rs.) Equity capital (3 million shares of Rs. 10 par). 30,000,000 Preference capital (25000 shares of Rs.200 par, carrying 15 per cent dividend) 5,000,000 2,250,000 Reserves and surplus 20,000,000 Debentures (150000 debentures of Rs. 100 par, carrying 14 per cent interest) 15,000,000 14,500,000 Total 70,000,000 70,750,000 The expected dividend per share is Rs.1.20. The dividend per share is expected to grow at a rate of 7 per cent forever. Preference shares are redeemable after five years, whereas debentures are redeemable after 6 years. The tax rate for the company is 30 per cent. Calculate the weighted average cost of capital for the existing capital structure, using both book value and market value proportions as weights. Market Value (Rs.) 54,000,000