QUESTION ONE (20 Marks) Manny Co is a listed company that plans to spend K10m on expanding its existing business. It has been suggested that the money could be raised by issuing 9% loan notes redeemable in ten years' time. Current financial information on Manny C o is as follows. The current ex div ordinary share price is K4.50 per share. An ordinary dividend of K0.35 per share has just been paid and dividends are expected to increase by 4% per year for the foreseeable future. The current ex div preference share price is K0.76. The loan notes are secured on the existing noncurrent assets of Manny Co and are redeemable at par in eight years' time. They have a current ex interest market price of K105 per K 100 loan note. Manny Co pays tax on profits at an annual rate of