Petalt plc wishes to carry out a shareholder value analysis for which it has gathered the information shown below:

The managers do not yet know the cost of capital but do have the following information. The capital is in three forms:

1 A floating-rate bank loan for 1m at 2 per cent over bank base rate. Base rates are currently 9 per cent.

2 A 25-year bond issued 20 years ago at par (100) raising 1m. The bond has an annual coupon of 5 percent and is currently trading at 80.

3 Equity capital with a market value of 2m. The rate of return available by purchasing government securities is currently 6% and the average risk premium for shares over the risk-free rate has averaged 5%. The share has beta 1.3.

Corporate tax rate is 31%

a calculate the cost of bond finance.

b calculates the cost of equity finance

c calculates the cost of bank loan

d calculate the WACC