1. If Stargate Nation Sdn Bhd stock price fall to 0.7 times book value and the cost of equity fell to 13.5 percent, calculate the firms weighted average cost of capital (assume the cost of debt and tax rate do not change).

Stargate Nation Sdn Bhd operates a very successful manufacturing plant in Batu Kawan Industrial Area. The company needs to raise funds for its planned expansion into the Northern Part of Malaysia. The firm's balance sheet at the close of 2021 appeared as follows: The company's management estimates that the market requires 16 percent return on its common stock, the firm's bonds command a yield to maturity of 8.5 percent, and the firm faces a tax rate of 33 percent. At the end of the previous year Stargate Nation's common stock was selling for a price 1.6 times its book value, and its bonds were trading near their par value