Devon Limited is a company that has issued corporate bonds with a par value of K100 and a coupon rate of 11%. The Total Statement of Financial Position value of bonds is K50million. The company's bonds are currently trading at a price of K103. Interest is payable annually in arrears. The maturity date is in four years time. The company has a target capital structure of 25% debt, 15% redeemable preference shares, 10% non-redeemable preference shares, and 50% in ordinary equity financing. Retained earnings and contributed capital amount to K100million.

The company has two types of preference shares in issue. There are 0.2 million non-redeemable preference shares which are issued at K100 per share and there are 0.3 million redeemable shares which were also issued at K100 and are redeemable at K100 per share. The maturity date of redeemable shares is in four years' time. Preference dividends are payable annually in arrears for both issues. Non-redeemable preference shares are currently priced at K107 and the redeemable preference shares are currently priced at K104. The coupon rates are 9% for each issue and coupon payments were recently paid.

The company's beta is 1.20 and the risk free rate is 8%. The market premium is expected to be 5.5%. The corporation tax rate is 28%.

Required:

(a) What is Devon's after tax cost of debt?

(b) What is the cost of the two types of preference shares?

(c) What is the cost of equity?

(d) What is the company's weighted average cost of capital?