The following table gives Coleman Company's earnings per share for the last 10 years. The common stock, 10 million shares outstanding, is now (1/1/20) selling for PKR80 per share. The expected dividend at the end of the current year (12/31/20) is 35% of the EPS2019. Because investors expect past trends to continue, 'g' may be based on the historical earnings growth rate.

Year, EPS (PKR)

2010, 4.20,

2011, 5.25,

2012, 5.36,

2013, 5.95,

2014, 6.45,

YEAR, EPS (PKR)

2015, 6.45

2016, 7.20

2017,7.29

2018,8.35

2019,8.90

The current interest rate on new debt is 7%; Coleman's marginal tax rate is 35%, and its target capital structure is 30% debt and 70% equity. a) Calculate Coleman's after-tax cost of debt and common equity. [2marks] b) Find Coleman's composite cost. [2marks]