You are required to determine the weighted average cost of capital (ko) of the R.S. Ltd. using (i) Book value weights; and (ii) Market value weights. The following information is available for your perusal: The R. S. Ltd.'s present book value capital structure is: Rs. Debentures (Rs. 100 per debenture) 8,00,000 Preference share (Rs 100 per share) 2,00,000 Equity Share (Rs. 10 per share) 10,00,000 20,00,000 All these securities are traded in the capital markets. Recent prices are debentures @ Rs. 110. Preference shares @ Rs. 120 and equity shares @ Rs. 22. Anticipated external financing opportunities are: (i) Rs. 100 per debentures redeemable at par : 20- year maturity, 8% coupon rate, 4% floating costs, sale price Rs. 100. (ii) Rs. 100 preference share redeemable at par: 15-year maturity, 10 % dividend rate, 5% floating costs. Sale price Rs. 100. (iii) Equity shares : Rs. 2 per share floatation costs, sale price Rs. 22. In addition, the dividend expected on the equity share at the end of the year is Rs. 2 per share; the anticipated growth rate in dividends is 5% and the company has the practice of paying all its earning in the form of dividends. The corporate tax-rate is 50%.