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(a) Efficient Market Hypothesis (EMH) is a hypothesis that states the share prices reflect all information. i. List FOUR (4) assumptions EMH. (4 marks) ii.

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(a) Efficient Market Hypothesis (EMH) is a hypothesis that states the share prices reflect all information. i. List FOUR (4) assumptions EMH. (4 marks) ii. Discuss THREE (3) sub-hypotheses on EMH. (6 marks) (b) The capital structure of Mubeen Berhad and Mydeen Berhad are at the same level of value. Mubeen Berhad has RM2,000,000 debt with 5 percent interest charge, while Mydeen Berhad is totally financed by equity with a cost of capital 18 percent. Recently, Mydeen Berhad earned RM1,500,000 profit before interest and tax. Determine Weighted Average Cost of Capital (WACC) for Mubeen Berhad by using MM theory proposition II if the tax rate is 35 percent. (10 marks) (c) Unsystematic risk is diversifiable risk that is unique only to a particular company which is occur inside or within the company. Discuss TWO (2) sources of unsystematic risk

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