Equity capital (20 million shares, Kshs.10 par) Kshs. 200 million Preference capital, 12 percent (500,000 shares, Rs.100 par) Kshs. 50 million Retained earnings Kshs. 350 million Debentures 14 percent (1,200,000 debentures, Rs.100 par) Rs. 120 million Term loans, 13 percent Kshs. 80 million ………………… Kshs.800 million ………………… The next expected dividend per share is Kshs.2.00. The dividend per share is expected to grow at the rate of 12 percent. The market price per share is Kshs. 50.00. Preference stock, redeemable after 10 years, is currently selling for Kshs.85.00 per share. Debentures, redeemable after 5 year, are selling for Kshs.90.00 per debenture. The tax rate for the company is 30 percent. Required: Calculate the average cost of capital.