Question 3 (20 Marks) (a) Discuss the measures stakeholders undertake to minimize the costs of equity. (5 marks) (b) Angaza Ltd is in high growth sector. It has identified viable projects that can create value for the firm which it can finance with internally generated funds. The firm raises Kshs.50 million from shareholders and uses this cash to pay them Kshs.50 million in dividends. If dividend is taxed at 10% and capital gains are taxed at 5%, how much will the shareholders receive after taxes? (6 marks) (c) One reason for paying dividend is the clientele effect. Explain how this affects the decision to pay dividend? (5 marks) (d) In an efficient market with no tax effects, should an acquiring firm use cash or stock? (4 marks)