Question 3 (a) Ramona Holdings is considering investing in a new project and has the following capital structure: Bond (Cost of Debt) The company estimate that it can issue RM1,000 par value bonds that pay 11 percent interest rate annually and will mature in 15 years. The tax rate is 36 percent. Preferred Share The company can issue preferred share at market value of RM112 per share which pays a constant dividend of 6 percent at par, RM100 per share. The costs of issuing and selling the share will be RM4 per share. Common Share The common stock is currently selling at RM26 per share. The company has paid a dividend of RM4.50 per share last year. This dividend is expected to grow at a constant rate of 5 percent per year and flotation cost will be 10 percent of the selling price. Based on the information given, calculate Weighted Average Cost of Capital (WACC) of Ramona Holdings. (22 marks) (b) Ramona Holdings' bond currently sell for RM1,150, have an 11 percent coupon rate and a RM1,000 par value which pay interest annually, and have 15 years to maturity. Calculate the bonds' yield to maturity (YTM). (8 marks)