Megabits Bhd. (Megabits) is a listed company on Bursa Malaysia. It is reviewing its cost of capital in preparation for its future expansion. Its latest capital structure components as at 31 July 2018 are given below: Capital structure components % Long term loan 25 Preference share (par value RMI) 15 Common share capital (par value RMI) 60 Megabits expected net income for this year is RM34,285. Its established dividend payout ratio is 30%. Corporation tax rate is 40% and investors expect future earnings and dividends to grow at a constant rate of 9%. Megabits paid a common dividend of RM3.60 per share last year. Its common share is currently selling for RM54 per share. Megabits sells preference shares to the public at a price of RM90 per share with a dividend payment of RM9. Debt is sold at an interest rate of 10%. Required: (a) Calculate the cost of each capital component: (i) Long-term loan after tax; (ii) Preference share; (iii) Cost of equity using the Constant Growth Model (Gordon Model). (12 marks) (b) Estimate the Weighted Average Cost of Capital (WACC) of Megabits Bhd. (4 marks)