The company intends issue bonds that will pay 7% yearly coupon rate with a total face value of $200 million. The bonds will mature in 20 years. An official investment banker for the company has estimated that bonds of equal risk and credit rating are now selling at a yield of 10 % per annum. The company's ordinary share has a price of $30 with an expected dividend of $1.20 per share. The expected growth rate for earnings and dividends per share is 11% per annum. The preference stock is selling at $40 per share and carries a dividend of $2.00 per share. The flotation costs are 2.0% of the selling price for the preference shares, no floatation costs will be incurred for any new debt and common stocks issued. The capital structure of the firm is comprised of 50% debts, 5 % preference shares and 45% ordinary shares. The corporate tax rate is 30%.

a. Calculate the firm's cost of ordinary shares (5 marks).

b. Calculate the firm's cost of preference shares (5 marks).

c. Calculate the firm's cost of debt (5 marks).

d. Calculate the firm's after tax weighted average cost of capital (WACC) (5 marks).