Ltd. is evaluating its cost of capital under alternative financing arrangements. It expects to be able to issue new debt at Par with a coupon rate of 8% and to issue new preferred stock with R 2.50 per share dividend at R25 a share. Its common stock is currently selling for R20 a share and expected to pay dividend of R1.50 per share next year. Market analysts foresee growth in common stock dividends at a rate of 5% per year. The companys marginal tax rate is 35%. If ROE is using 45% debt, 5% preferred stock and 50% common stock. Compute the companys cost of capital.