Ossoom Bhd has to decide which of the following four projects should be selected

Projects	Initial Investment (RM)	IRR (%)
Erengel	500000	14
Miramar	400000	8
Sanhook	600000	12
Vikende	300000	10

Below is the capital structure for the firm

Sources	Weight (%)
Common Stock	60
Preferred Stock	20
Debt	20

The current cost of debt (before taxes) is 10 percent for the first RM200,000. The cost of any additional debt (before taxes) is 13 percent.

The after tax cost of preferred share is 8 percent for the first RM300,000. Exceeding that amount, the cost will increase to 10 percent.

The current market price of its common equity is RM40. The companys current dividend is RM2 per share. The expected growth rate in earnings and dividends is 8 percent. If new common stock issued, it will incur floatation cost of 15 percent of the selling price. The company has RM300,000 retained earnings.

The marginal tax rate is 25 percent.

1. Determine the weighted average cost of capital (WACC) for all the identified range of financing.
2. Construct the weighted marginal cost of capital (WMCC) curve and identify which project should the company choose? Why?