(b) ManUnito plc. is a UK based pharmaceutical company, and the following information regarding the financial position of the company is provided by their financial director Ms. Jones: Number of shares outstanding Market value of debt (AA rating) Expected yield of the debt Corporate tax rate Risk-free rate Market risk premium 15,000,000 30,000,000 8% 30% 3% 5% 2.00 1.60 Current share price Beta value of the share In addition, Ms. Jones is considering two mutually exclusive projects by taking extra finance, and cash flows of each project are shown below: Points in time (yearly intervals) Project A () Project B () 0 1 -12,000 -10,000 5,000 4,000 23 5,000 4,000 5,000 4,000 i) Calculate the weighted average cost of capital of ManUnito plc. [8 marks] ii) Advise Ms. Jones which project to undertake by applying net present value (NPV) approach. Assuming weighted average cost of capital is the appropriate discount rate. [4 marks]