Question No. 3 1. Define cost of capital and briefly describe the types of it in your own words. [2] b. Compute the cost of debt capital for the following situations. [8] (1) A Ltd, issues $150,000, 8% debentures at par. The tax rate applicable to the company is 30%, (ii) B Ltd. issues S250,000, 8% debentures at a premium of 15%. The tax rate is 30%. (iii) A Ltd. issues $350,000, 8% debentures at a discount of 15%. The tax rate is 30%. (iv) B Ltd. issues S450,000,9% debentures at a premium of 10%. The costs of floatation are 2%. The tax rate applicable is 30%