Mega Coal ple has bought land that contains deposits of coal that will be mined. The land is expected to produce coal for five years and then the land will be sold. The initial costs involved in buying the land and equipment for mining are $3 000 000. The finance director suggested two possible methods to finance the robot project: Option A - a bank loan for the full 3 000 000, at an interest rate of 12% per year. Option B-a funding package from a range of sources. The details are shown below. Interest rate/ Option B Expected return Debenture Bank loan Preference shares Ordinary shares Total 1 600 000 1 000 000 200 000 200 000 3 000 000 15% 12% 10% 5% Required: (1) Calculate the weighted average cost of capital for Option B. (7 points) (2) Identify which of the two options, A or B, would be the best to finance the project, giving a reason for your answer. (2 points) (3) Explain two reasons why the interest rate on a bank loan may be higher than the expected return of an ordinary shareholder. (4 points)