The balance sheet extract prior to the expansion is as follows:

$\backslash$table$[[$Extract of the Statement of Financial Position,R$],[$OWNERS$\text{'}$ EQUTTY,$],[$Ordinary Shares,R $4500000],[$Preference Shares,R $1000000],[,],[$LONG$-$TERM DEBT,$],[$Debentures$,$R $3500000]]$

They provide you with the following additional information:

The dividend per share last financial year was $150$ cents per share

The dividend growth rate of the industry was $7\mathrm{.}25\%$

The current share price on the stock exchange is trading at R$1\mathrm{.}425$ per share

The beta for the company is $1\mathrm{.}375$

Govemment bonds carry a return of $6\%$ and the additional risk for the average market is $4\mathrm{.}25\%$ above this.

The preference share capital was issued at R$5$ per share. An annual $10\%$ dividend is paid at the end of each year. The shares are currently trading at R$5\mathrm{.}50$ per share.

Debentures due in $7$ years with a before tax cost of $10\%$

The company tax rate is $28\%.$

REQUIRED:

Calculate the cost of:

$1\mathrm{.}1$ Ordinary shares using the Capital Asset Pricing Model

$(3)$

$(3)$