(2x4=8 Marks) Question (1): Consider the following facts provided for ALFA Corporation: Bank Debt information: rd: Interest rate on bank loans 12 % - T: Annual Tax rate 20 % Preferred stock information: - Dps: Annual Dividends on preferred stock $ 15 - P: Issuing price of ALFA Corporation preferred Stock $ 120 - FC: Flotation cost on issue of preferred stock/ per share $ 3 Common Stock information: - r RF: Market risk Free Rate 6% - RP: Expected Market Risk Premium 4 % - b: ALFA stocks beta coefficient index of the stocks risk) 1.0 ALAFACorporation plans to get new fund for a new project; the project financing will be allocated according to the following capital structure: 40% Weight of Debt Wd: Weight of Preferred Stock Wps: 40% Weight of Common Stock W: 20% Required: a. Calculate the cost of debt. b. Calculate the cost of preferred stock. c. Calculate the cost of common stock. d. Calculate the weighted average cost of capital (WACC I). > ALAFACorporation plans to get new fund for a new project; the project financing will be allocated according to the following capital structure: Weight of Debt Wd: 40% Weight of Preferred Stock Wps: 40% Weight of Common Stock W: 20% Required: a. Calculate the cost of debt. b. Calculate the cost of preferred stock. C. Calculate the cost of common stock. d. Calculate the weighted average cost of capital (WACC 1)