i) You are analysing the after-tax cost of debt for Mellow Ltd. You know that the company's 12-year maturity, 9.5 per cent coupon bonds with a face value of $1000 are selling at a price of $1,200. The bonds pay interest semi- annually. If these bonds are the only debt outstanding for the company, what is the after-tax cost of debt for this company if the corporate tax rate is 30 per cent? ii) Mellow Ltd's ordinary shares and preference shares currently sell for $40 per share and $37 per share. If the company just paid an annual dividend of $2.5 per common share and $3 per preference share. The company expects common shares dividends to increase by 3% per year forever being public knowledge. a) What is the current cost of ordinary equity for the company? b) What is the current cost of preference equity for the company? iii) Mellow Ltd has capital structure that is based on current market values, with 21% debt, 19% preference shares and 60% ordinary shares. Using the information mentioned above, what is Mellow Ltd's after-tax WACC? iv) Mellow Ltd takes on projects of various risk levels. The company experience suggests that low-risk projects have a cost of capital of 7%, medium-risk projects have a cost of capital of 9% and high-risk projects have a cost of capital of 13%. Which of the following projects should the company select to maximise shareholder wealth? Which projects will the firm falsely accept or reject if it uses WACC as the discount rate to select its projects? Project Expected Return Risk . 8 percent Low B 11 percent Medium 6 percent Low D 12 percent High