QUESTION 3 (25 Marks) (a) Briefly explain Walter model of dividend relevance school of thought by taking a hypothetical example or case? (10 marks) (b) Differentiate between debt and common stock as financing option for a business organization? (5 marks) (c) From the following capital structure calculate Weighted average cost of capital by: (10 marks) Book Value method Market value method Tid Dosen Koordinator Die prodi found After tax cost of different components is as follows: Cost of equity capital=12% Cost of debt=8% Cost of preference shares=10% Cost of retained earnings=11% Market Value 600000 Source Equity share capital Retained earnings Preference share Debenture Book Value 450000 150000 200000 400000 200000 400000