Alfamedics Lts received Rs 10 crores as equity through a new issue of equity shares. The company is going to use the proceeds from equity shares and its retained earnings worth 5 crores for the expansion purpose of one of the project.
The equity shareholders expects a desired return of 14%. The cost of bringing the equity issue is 2%. 

Define these terms and discuss how the cost of external equity and cost of retained earnings differs from cost of debt?