CP India Ltd has the following capital structure, which it considers optimal:

Debt 25%

Preference Shares 15%

Equity shares 60%

Total 100%

Applicable tax rate for CPIL is 25%. and investors expect earnings and dividends to grow at a constant rate of 9% in the future. Risk free rate of return is 6%, average equity share has expected rate of return of 15%. CPIL's beta is 1.50. Following terms would apply to new securities being issued as follows:

1. New preference can be issued at a face value of Rs. 100 per share, dividend and cost of issuance will be Rs. 8 per share and Rs. 4 per share respectively.

2. Debt will bear an interest rate of 10%.

Calculate

a. Component cost of debt, preference shares and equity shares assuming that CPIL does not issue any additional equity shares.

b. WACC.