Wonka Plc is a large diversified company that has two divisions: one manufacturing automobiles and the other offering a range of financial services. The following information relates to the current balance sheet of Wonka Plc: 000 Ordinary share capital: Authorised: 20,000,000 shares of 0.50 10,000 Issued: 16,000,000 shares of 0.50 8,000 Share Premium 2,000 Reserves 10,000 Shareholder's funds 20,000 8% Redeemable debentures 16,000 7% Bank loan 5,000 An ordinary dividend of 10p per share has just been paid. In the past, ordinary dividends have grown at a rate of 8% p.a. Ordinary shares are currently quoted at 0.75. The debentures are redeemable at par in 5 years time. Their current market price is 85 int. Annual interest is due to be paid shortly. The current rate of corporation tax is 35%.

a.)What is the cost of capital for Wonka Plc?