A & Z has to raise RM3 million for its five-year budget. The company is considering the following financing sources to meet its requirement: - Issue new common stock at 1 percent less than the market with the floatation cost of RM2 per share. The latest dividend paid by the company was RM1 per share. The dividend is expected to grow at an annual rate of 5 percent forever. Currently, the share price is trading at RM30 per share. Issue a bond with a RM1000 par value that pays 7 percent annual interest and matures in 5 years. The bond has a market value of RM958 and a floatation cost is 11 percent of the market value. The corporate tax rate is 25 percent. Multiple Choice (Total Point: 3.00) #28 Compute the cost common stock for A & Z Answer o Kcs = 8.75 percent o Kcs = 8.33 percent o Kcs = 8.57 percent Kos = 8.47 percent