Fima Berhad Group is considering several projects as shown below. To take into account the risks of each of these projects, the Fima Group will add 2% to the weighted average capital cost (WACC) for high-risk projects and subtract 2% of the WACC cost for low-risk projects. Required project Expected Return investment (RM) Risk Rate(%) 11 120 000 Low 520 000 high 13 170 000 moderate 470 000 high E 10 620 000 moderate 320 000 Low 9 A B D 15 F 10 The Fima Group has a capital structure of 40% debt, 15% preference shares and 45% ordinary equity. The Fima Group has a strong financial position. Therefore, the company is able to get a new bank loan at an interest rate of 10%. Apart from bank loans, Fima Group also intends to issue preference shares at RM100 per share with a dividend payment of RM12 per annum. Fima Group shares are currently priced at RM85 per share. Dividend for ordinary shares last year was RM5 per share and this amount is expected to increase steadily at a rate of 6% per annum. If the Fima Group issues new ordinary shares, it will have to pay a floating cost of 10%. Fima Group pays a 40% tax rate. a) Calculate: Cost of debt after tax () Preference share cost (iii) Retained income costs (iv) Cost of issuance of new ordinary shares (b) Assuming that the existing capital structure is the target capital structure of the company, calculate the weighted average capital cost (WACC) of the Fima Group if it uses retained earnings for its equity component. C) Assume that all the above projects are separate projects and the Fimat Group has no capital constraints. ( Which projects (or projects) can the Fima Group accept? Why? (ii) Based on the answers in part 0), how much new financing does the Fima Group need