XYZ Ltd has commenced operations with the following capital structure:

XYZ Ltd: Statement of financial position as at date of incorporation

Assets	$
Sundry Assets	1,000,000
Liabilities and shareholders' funds
Debentures, 8% (10 years)	300,000
Preference Shares, 9%	200,000
Ordinary Shares, issued and paid up 500,000 at $1	500,000
	1,000,000

Other information are:

• The company prospectus contains estimates that it will earn $100,000 in the first year and pay dividends of 10% per share.
• Brokers anticipate that dividend will grow at 5% per annum.
• The shares are currently selling at $1.00.
• The company tax rate is 30%, and the proportion of tax collected from the company that is claimed by shareholders is 0.60.

Calculate the cost of capital for XYZ Ltd.