Help me in providing answers to the problems below.

Sarah recently inherited a substantial sum of money. Her friend Tom is a successful businessman who owns a small factory. Tom is a sole trader. He has offered Sarah the opportunity to become a sleeping partner in his business. She will invest (200,000 of her inheritance in return for a partnership share of 30% of all future profits. She will not take any part in the running of the business. The business is profitable and is struggling to keep up with demand, so the expansion will probably be successful. Describe the risks that Sarah will be taking on if she enters into this arrangement with Tom [5]Partan is a quoted company. The directors have asked for a report on the company's cost of capital. The following information has been provided: . The market capitalisation of the company's equity is $600 million . The company has debentures with a face value of $250 million. Their market value is $220 million . The corporation tax rate is 23%. . The risk-free rate of interest is 4% per annum . The ungeared beta on Partan's equity is 1.3. . The debentures have a coupon rate of 5% and are redeemable at par in five years' time. . The market rate of return is 9% p.a. The directors have already calculated Partan's weighted average cost of capital (WACC), but they wish you to prepare a calculation in order to confirm their figures. They are concerned that the WACC is higher than they think is justified and they wish to discuss some proposals for reducing the figure because the directors plan to raise further finance in order to fund expansion, but they are unwilling to do so if the cost of capital is overstated. (i) Determine Partan's cost of equity using the company's geared beta. [4] (ii) Determine Partan's approximate cost of debt. [4] (iii) Calculate Partan's WACC. [2] The marketing director has suggested that the company could dramatically reduce the cost of capital if the board promotes the company in the same way that it promotes its products. The directors should identify the market's needs and explain to those who provide finance just how well suited Partan is to meeting those needs. (iv) Discuss the logic of the marketing director's proposal for reducing the WACC. [10] [Total 20]