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(b) Calculate the overall cost of capital of Sushant Ltd. from the information given below using book value weights and market value weights : Equity

(b) Calculate the overall cost of capital of Sushant Ltd. from the information given below using book value weights and market value weights : Equity Shares of 10 each 12% Preference Shares of 100 each (Redeemable at par after 10 years) 11% Debentures of 100 each (Redeemable at par after 5 years) Reserves Book Value (3) 4,00,000 1,00,000 2,50,000 1,00,000 Market Value 6,40,000 75,000 Te 2,25,000 Last year the company paid a dividend of 2.20 per share. It is expected to declare a dividend of 2.42 per share. The com- pany has been maintaining the growth rate in dividends over the years and is expected to do so in future. Tax rate is 40%

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