From the case below, wite down a summary of your understanding within 300 Words.

Cost of capital refers to the discount rate that is used in determining the present value of the estimated future cash proceeds of the business/new project and eventually deciding whether the business/new project is worth undertaking or now. It is also the minimum rate of return that a firm must earn on its investment which will maintain the market value of share at its current level. It can also be stated as the opportunity cost of an investment, i.e. the rate of return that a company would otherwise be able to earn at the same risk level as the investment that has been selected. In order to calculate the specific cost of each type of capital, recognition should be given to the explicit and the implicit cost. The cost of capital can be either explicit or implicit. The explicit cost of any source of capital may be defined as the discount rate that equals that present value of the cash inflows that are incremental to the taking of financing opportunity with the present value of its incremental cash outflows. Implicit cost is the rate of return associated with the best investment opportunity for the firm and its shareholders that will be foregone if the project presently under consideration by the firm was accepted. Calculate the WACC using the following data by using: (a) Book value weights (b) Market value weights The capital structure of the company is as under: INR. Debentures (`INR. 100 per debenture) 5,00,000 Preference shares (INR. 100 per share) 5,00,000 Equity shares (INR. 10 per share) 10,00,000 20,00,000 The market prices of these securities are: Debentures INR` 105 per debenture Preference shares INR` 110 per preference share Equity shares INR` 24 each. Additional information: (1) INR. 100 per debenture redeemable at par, 10% coupon rate, 4% floatation costs, 10 year maturity. (2) INR. 100 per preference share redeemable at par, 5% coupon rate, 2% floatation cost and 10 year maturity. (3) Equity shares has INR. 4 floatation cost and market price INR. 24 per share. The next year expected dividend is INR` 1 with annual growth of 5%. The firm has practice of paying all earnings in the form of dividend. Corporate tax rate is 50%.