Part B Tluee companies ET ple, Ant ple, Tiger ple operate in the same type of business and hence incur similar operation risks. However, the companies have different capital structure as described in the following tables. Ordinary shares number issued nominal value Market Price Dividend per per share per share share ET plc 400,000 $ 1 139 0.25 Antiek 1,000,000 $ 0.25 0.49 Tiger 1,000,000 $ 0.5 0.38 0.08 Debentures Total nominal value nominal value Per bond 0.09 ET ple Price nominal Int Rate Ant ple $100,000 $100 $72 10% Tiger ple $350,000 $100 $53 S Current levels of dividends are generally expected to contimie indefinitely. The debenture of Ant and Tiger are not redeemable Dividends are stated set of imputation of tax. All prices as quoted as ex dividend or interest, dividend and interest payments are paid annually. Assume the corporation tax is 50%. Required a) Prepare caleulations to show the cost of capital for each of the 3 companies, 15 marks b) Compute and explain if any, which company has the preferable capital structure 10 marks