QUESTION 2 (15 MARKS) a. Hanafi Corporation has a cost of debt of 7%, a cost of equity of 11%, and a cost of preferred stock of 8%. The firm has 104,000 shares of common stock outstanding at a market price of RM20 a share. There are 40,000 shares of preferred stock outstanding at a market price of RM34 a share. The bond issue has a total face value of RM500,000 and sells at 102% of face value. The company's tax rate is 34%. What is the weighted average cost of capital for Hanafi Corporation? (10 marks) b. Based on your answer in (i), calculate the Weighted Average Cost of Capital (WACC) for each of the following financing arrangements: Financing Arrangement Percentage of New Capital Raised Preference Share Debt Ordinary Share 60% 1 30% 10% 2 50% 25% 25%