Bata Shoes has taken debt of Rs. (Enter your registration number) at the rate of 25% from MCB and another debt of Rs. (Reverse the order of your registration number) at the rate 25% from HBL. The company has obtained equity financing through issuance of stocks. Total size of equity is 50 million. Analysts think that the appropriate risk premium for Bata Shoes is 9%, risk free is 8% and Bata shoes has beta of 1.40. Bata Shoes has currently paid a dividend of Rs.3 per share. The market price of stock of Bata Shoes is Rs.50. The expected constant growth rate in dividend is 5% which will remain same throughout the period of analysis

. a. Define cost of capital and Weighted Average Cost of Capital.

b. Calculate cost of equity under Dividend Discount Model

. c. Calculate cost of equity under Capital Asset Pricing Model.

d. Calculate Weighted Average Cost of Capital using different estimated values of cost of equity under parts b and c.