A fast growing company wants to expand its total assets by $50\%$ by the end of the current year. You have been given below the company$$s capital structure which it considers it to be optimal. There are no short term debts.

$8\%$ Debentures Rs$.4,00,000$

$9\%$ Preference Shares Rs$\mathrm{.}1,00,000$

Equity Shares Rs$.5,00,000$

Total : Rs$\mathrm{.}10,00,000$

New debentures would be sold at $14\%$ coupon rate and will be sold at par. Preference share will have a $15\%$ rate and will also be sold at par. Equity shares currently selling at Rs$\mathrm{.}100$ can be sold to net the company Rs$\mathrm{.}95.$ The shareholders required rate of return is to be $17\%$ consisting of a dividend yield of $10\%$ and an expected growth rate of $7\%.$ Retained earnings for the year are estimated to be Rs$50,000($ignore depreciation$).$ The corporate tax rate is $50\%.$ You are required to calculate the following values:

a$)$Assuming all assets expansion $($gross expenditure for fixed assets plus related working capital$)$ is included in the capital budget, what is the required amount of capital budget?

b$)$How much of the capital budget must be financed by external equity $($i$.$e$.,$ issue of new equity shares$)$ to maintain the optimal capital structure?

c$)$Calculate the cost of $($a$)$ new issue of equity shares and $($b$)$ retained earnings.

d$)$ Calculate the weighted average cost of capital using marginal weights.