Determine the weighted average cost of capital using $(1)$ book value weights; and $(2)$

market value weights based on the following information:

Book Value Structure

Recent market prices of all these securities are: Debentures: $110$ per Debenture;

Preference shares: Equity shares: $22$ per share.

External financing opportunities are:

$($i$)$ Rs$.100$ per Debenture redeemable at par, $10$ year maturity, $13\%$ coupon, $4\%$

flotation cost, and sale price Rs$.100$

$($ii$)$ Rs$.100$ per Preference Share redeemable at par, $10$ year maturity, $14\%$ dividend

rate, $5\%$ flotation cost, and sale price Rs$.100$

$($iii$)$ Equity shares: Rs$.2$ per share flotation costs and sale price Rs$.22$

Dividend expected on equity shares at the end of the year is Rs$.2$ per share;

anticipated growth rate in dividends is $7\%.$ Company pays all its earnings in the form of

dividends. Corporate tax rate is $30\%.$