Q3 (a) Honba Corporation is interested in measuring the cost of each specific type of capital as well as the weighted average cost of capital in the evaluation of the purchase of a new high-tech machine to be used for business operations. Adinda, who works as a consultant to Honba has been asked to prepare the analysis. Adinda has determined the market value of Honba's current capital structure (in which the firm considers to have a mix of financing sources) as shown in Table Q3(a): Table Q3(a): Market Value of Financing Sources Source of capital Long-term debt Preferred stock Common stock Market Value RM5,500,000 RM750,000 RM3,500,000 To finance the purchase of the new high-tech machine: 1. Debt. Honba Corporation will issue 20-year bonds with a 1,000 par value paying 7 percent per year (with interest paid semiannually) at the market price of RM1,150. 2. Preferred stock. Regardless of the amount sold, the preferred stock will be issued with a RM45 per share and paying a RM1.80 dividend. 3. Common stock. The current price for Honbas common stock is RM60 per share. The firm expects the dividend to continue growing at a rate of 3 percent per year for the foreseeable future and has paid a cash dividend of RM2.80 last year. 4. The firm's marginal tax rate is 40 percent. (1) Compute the capital structure weights of each financing source. (5 marks) (ii Compute the weighted average cost of capital (WACC) should Adinda use to evaluate the new high-tech machine project. (12 marks) (iii) Determine a conclusion based on the calculation in Q3(a)(ii)