Bestari Berhad is evaluating its cost of capital based on various alternative financing arrangements. It expects to be able to issue new debt at par with a coupon rate of 8% and to issue new preference share with a RM2 per share dividend at a price of RM30 per share. The ordinary share is currently selling for RM25 a share. It expects to pay a dividend of RM1.50 per share next year. Bestari Berhad expects dividends to grow at a rate of 5% per year and Bestari Berhad tax rate is 40%.

You are required to:

1. Calculate the cost of debt, cost of preference share and cost of ordinary share.