a)What is cost of capital? Why is it called the opportunity cost?

b) A company issues a new 12% debentures of Tk. 1,200 face value to be redeemed after 10 years. The debenture is expected to be sold at 5% discount. It will also involve floatation costs of 3% of face value. The companys tax rate is 30%. What would the cost of debt be?

c) A company issues 15% irredeemable preference shares of the face value of Tk. 100 each. Flotation costs are estimated at 4% of the expected sale price. What is the cost of preference share if is issued as per value?