Name: Matric No: TEST 2 - BAFB3013 Financial Management (CLO2) There are TWO (2) questions in this section. Answer ALL questions. Question 1 ABX Sdn Bhd. expects EBIT of RM2,000,000 for the coming year. The firm's capital structure consists of 40% debt and 60% equity, and its marginal tax rate is 27%. The cost of equity is 14% and the company pays a 10% rate on its RM5,000,000 long-term debt. One million shares of common stock are outstanding. (20 Marks) In the next capital budget cycle, the firm expects to fund one large positive NPV project costing RM1,200,000 and it will fund this project in accordance with its target capital structure. If the firm follows a residual dividend policy and has no other projects, what is its expected dividend payout ratio? (10 Marks)