QUESTION TWOZwangendawa plc is a listed medium$-$sized building materials company. Information regardingthe companys financing is given below:Statement of Financial Position $($Balance Sheet$)$ as at $1$ December $2011$K$000$Ordinary shares $($K$1$ par value$)2006\%$ Preference shares $($K$1$ par value$)9507\%$ Bonds $($irredeemable$)5001,650$Other information:Next announced dividend on ordinary shares: $19$pExpected future growth rate of dividends: $5\%$Cum div market price of ordinary shares: K$3\mathrm{.}73$Ex div market price of preference shares: $61$pMarket price of $7\%$ Bonds: K$93$ per K$100$ bondTax rate: $30\%$ per yearRequired:a$)$ Calculate the weighted average cost of capital of Barnstable plc$,$ using market values. $(12$marks$)$b$)$ Outline the assumptions which underpin the dividend growth model. $(5$ marks$)$c$)$ Discuss the main considerations which a company must take into account when decidinghow to invest short term surplus cash funds. You are not required to discuss where surplusfunds could be invested. $(8$ marks$)$