Q-1: EBIT of Shell for year 2010 is Rs. 4,000,000. It pays Rs. 2000,000 as dividend. Its number of shares outstanding is 2,000,000 par values Rs. 50 each sold at discount at Rs. 40 each. Retained earnings balance on January 1, 2010 was Rs. 1,2000,000. Assume there is no preferred stock, beta of Shell is 0.5, risk free rate on T-bills is 14% and market risk premium 6%. Interest expense is Rs. 500,000, tax rate is 40% and book value of long term debt is 3 million. Calculate WACC for Shell Company.