Q2 Megah Holding has determined that its optimal capital structure is composed of the sources and target market value weights shown in the following Table Q2: Table Q2: Source of Capital and Target Market Value Weight Source of Capital Long-term debt Preferred stock Common stock equity Total Target Market Value Weight (%) 30 15 55 100 The cost of debt is 4.2%, the cost of preferred stock is 9.5%, the cost of retained earnings is 13%, and the cost of new common stock is 15%. All are after-tax rates. The company's debt represents 25%, the preferred stock represents 10%, and the common stock equity represents 65% of total capital on the basis if the current market values of the three components. The company expects to have a significant amount of retained earnings available and does not expect to sell any new common stock. (a) Calculate the following based on the given information in Table Q2: (i) The WACC on the basis of historical market value weights. (8 marks) (ii) The WACC on the basis of target market value weights. (8 marks) ( Explain the differences based on the answers obtained in Q2(a). (2 marks) (b)