ABC Berhad

ABC Berhad details of its' capital structure are as follows:

1. Purchased a property for RM1,000,000, paid in instalment of RM6,500 per months for the next 20 years.

2. Business Financing is RM800,000 at 5.53% p.a.

3. Vehicles financing is RM180,000 at 3.15% p.a.

4. The bond was sold for RM875 each with a maturity of 15 years. The coupon rate is 4%, semi-annual.

5. The company paid dividend in 2020 for RM0.20 and is expected to do so indefinitely. Price of stock now is RM2.35 each, and the growth rate is expected to be 3%.

6. The company wishes to issue RM500,000 in common stock. The price has been estimated to be at RM1.54, and the fee is RM0.15 each. The current dividend of the company is RM0.15, and growth rate is 3%.

7. The company's preferred stock is RM3.67, and the dividend paid has been for RM0.50 each.

8. Retained earning's cost of capital is 3.33%.

9. The values of the capitals are as follows:

Instrument	Value (RM)
Bonds	2,000,000
Common Stock	3,000,000
Preferred Stock	500,000
Retained Earnings	1,000,000

10. Tax rate is 24%.

Your answer is to be based on scenario being discussed in class.

12) The new bond will be sold for RM900 each, with transaction cost of 2% per bond, maturity of 15 years. The coupon rate is 4%, semi-annual.

13) The company is buying back RM1,000,000 of common stock and to issue new bonds to replace the funding. The total capital of the company is maintained with the buyback.

Calculate the before tax wacc of ABC Berhad. ________%. (2 decimals)

14) With the issuance of the bond,

The after tax wacc of ABC Berhad is ______%. (2 decimals)