QUESTION 4 a. As a trainee attached to the Finance Department of HHH Berhad in Rawang, Matthew has been assigned by Mr. Ahmad Mahmood, his industrial advisor on an assignment related to the sources of financing. HHH company is currently trying to raise some funds to finance an investment project. There are several sources of financing available for the company to undertake. Thus, based on the said alternatives, which source of financing should Matthew suggests to his supervisor to raise capital in order to finance the cost of the projects with minimum cost. REQUIRED: Compute the costs for each of the sources of financing: i. The retained eamings is RM4.2 million. The price of the common stock is RM48.00 per share, and the expected dividend this coming year should be RM2.80, increasing thereafter at a 5 percent annual growth rate. The corporation's tax rate is at 29 percent. II. New common stock issue paid a KM2.66 dividends last year. I he companys dividends per share should continue to increase at a 5 percent growth rate into the indefinite future. The market price of the stock is currently RM48.00, however, flotation costs of RM4.50 per share are expected if the new stock is issued. iii. A preferred stock selling for RM55.00 with an annual dividend payment of RM6.00. The flotation cost will be RM7.50 per share. The company's marginal tax rate is 29 percent. iv. A RM1,000.00 par value bond with a market price of RM980.00 and a coupon interest rate of 11 percent. Flotation costs for a new issue would be approximately 5.5 percent of market price. The bonds mature in 15 years, and the marginal corporate tax rate is 39 percent iv. Based on the computation, which sources should be considered to be taken by the manager