TALAMO FOODS Pty ltd has a total value of $ 1 million made of 50% common stock and 50% debt in forms of bonds. The bonds has a face value of $ 1000, pay 10% coupon per annum, matures in 10 years with yield to maturity (YTM) of 12%. TALAMO FOODS dividends are expected to grow at the constant rate of 5% and they just paid dividends of $ 5 per share. The ex-dividend price is $ 25 per share. TALAMO FOODS tax rate is 35%.

i. Calculate TALAMO FOODS cost of Equity. [3]

ii. Calculate TALAMO FOOD weighted average cost of capital (WACC)