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b) Permata Holding is determining its cost of capital based on the following information: I. 15 years bond with 10% coupon was issued 10 years

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b) Permata Holding is determining its cost of capital based on the following information: I. 15 years bond with 10% coupon was issued 10 years ago and its currently and floatation cost is 5% of par value. The par value is RM 1000. selling at RM980. The firm's tax bracket is 30% 2. The ordinary share of the company is currently selling at RM4 per share. The expected dividend for next year is RM0.30 and it is expected to grow at a constant rate of 8% every year. 3. The current price of its preferred share is RM1.20 Per share with the annual dividend payment of RM0.20. Floatation cost is 10% of its current price 4. A firm has determined its optimal capital structure which is composed of the following sources and percentage of financing Source of Capital Long-term debt Preferred stock Common stock equit Percentage of Financin 30% 20% 50% Required: i. Using the approximation method to calculate the firm's after-tax cost of debt ii. Calculate the firm's cost of preferred share iii. Calculate the firm's cost of common share iv. Calculate the firm's weighted average cost of capital (WACC)

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