Acrobat Reader DC (32-bit) 1 / 2 100% Je The following is the capital structure of a company: Book Value (RM) 800,000 Market Value (RM) 1,600,000 Source of Capital Equity Shares @ RM100 each 9% Cumulative Preference Shares @ RM100 each 11% Debentures Retained Earnings 200,000 240,000 660,000 600,000 400,000 2,000,000 2,500,000 The current market price of the company's equity share is RM200. For the last year the company had paid equity dividend at 25 per cent and its dividend is likely to grow 5 per cent every year. The corporate tax rate is 30 per cent. In the market, the risk free rate is 5.3%, market risk premium is 4.5% and beta is 1.3. You are required to calculate: (i) Cost of capital for each source of capital. (ii) Weighted average cost of capital on the basis of book value weights. (iii) Weighted average cost of capital on the basis of market value weights. o BA