QUESTION 6 (15 marks) (a) Distinguish between the following: Cost o Debt: Cost of Equity: Cost of Capital. Include in your answer. when should firms liscount at cost of debt. cost of equity or cost of capital. What is the relationship bet iveen these? (4 marks) (b) It has been suggested that while debt is less isky than equity from the perspective of an investor. it is riskier from the perspective of the firm. and vice versa for equity. What is your view? Explain. (5 marks) (c) A tirm has an asset base with a market val ue of $17 million. Its equity capital is worth $5.3 million and its shareholders expe ct a return of 18% pa. The firm also has interest of 8% pa on its debt. (i) What is the weighted average cost of calital if corpurate taxes are 35% ? (4 marks) (d) Discuss advantages disadvantages of us ng the Payback Period method in capital budgeting. (2 marks)