Question 2 Mentari Berhad holds a combination of debt, common shares and preferred shares in its capital structure. D Assume that the company has cost of debt before tax of 10% and the tax rate is 34%. Calculate the cost of debt. ii) Assume that a common share paid a dividend of RM4.50 last year. The value of this share is RM25 and dividends have grown at a rate of 8% per year and are expected to continue forever. The floatation cost is RM7 per share. Calculate the cost of common share. 111) Assume that a preferred share is paying a 10% dividend on a RM100 par value. If a new issue is offered, the floatation costs will be 12% and the current price of the share is RM95