Miss Fazilla is the newly appointed Finance Manager at Sup Bunjut Sdn Bhd$.$ Her first assignment is to report to the Board of Directors on the company's current cost of capital. She is presented with the following information:

Sup Bunjut Sdn Bhd Summary of Balance Sheet For Year Ended $2022$

Current Assets $50,000$ Lon term debt $10,000$

Inventories $20,000$ Bond $20,000$

Machine & e ui ment $10,000$ Preferred stocks $10,000$

Common stocks $40,000$

Total Asset $80,000$ Total Liabilities and E uities $80,000$

Information:

Long$-$term debt consists of $9\%$ coupon bonds and a yield of maturity is $12\%,$ maturing in five years. The face value of the bond is RMI, $000.$

Sup Bunjut Sdn Bhd issue perpetual preferred stock at a price of RMIOO a share. The stock is paying a constant annual dividend of RM$8\mathrm{.}50$ a share and has a required rate of return, of $13\mathrm{.}4\%$

Market risk$-$free rate is $9\%$ and the average return on the market is $15\%.$ The company's equity beta is $1\mathrm{.}2.$

Corporate tax is $35\%$ per annum.

From the above information you are required to answer the following questions:

a$.$ Determine the:

cost of common stocks. $(5$ Marks$)$

ii$.$ cost of debt $(5$ Marks$)$