SECTION B: LONG STUCRURED QUESTION 1 Star Animation Corporation producing animation movies and tv series. The company is planning to expand the business oversea to capture the market in Indonesia and needs RM5 million to invest in new building. The company is currently operating at debt to equity ratio of 100 percent. This new building is expected to generate aftertax cash flows of RM925,000 per year infinity. The tax rate is 30 percent. There are two financing options: Alternative 1 Issue new common stock of RM5 million. The issuance cost of the new common stock is estimated around 15 percent and the company's required rate of retum is 25 percent. Alternative 2 Issue RM5 million of 30 year bond. The issuance cost of the new debt is estimated around 3 percent of the proceed and the company can raise new debt at 10 percent. You are required to calculate the following:- i) The weighted average cost of capital (WACC) of the company. (3 marks) ii) The net present value (NPV) with no floatation cost. (3 marks) ii) The weighted average floatation cost (WAFC). (3 marks) iv) The amount of floatation cost for the proposed financing. (3 marks) v) The net present value (NPV) with floatation cost. (3 marks) SECTION B: LONG STUCRURED QUESTION 1 Star Animation Corporation producing animation movies and tv series. The company is planning to expand the business oversea to capture the market in Indonesia and needs RM5 million to invest in new building. The company is currently operating at debt to equity ratio of 100 percent. This new building is expected to generate aftertax cash flows of RM925,000 per year infinity. The tax rate is 30 percent. There are two financing options: Alternative 1 Issue new common stock of RM5 million. The issuance cost of the new common stock is estimated around 15 percent and the company's required rate of retum is 25 percent. Alternative 2 Issue RM5 million of 30 year bond. The issuance cost of the new debt is estimated around 3 percent of the proceed and the company can raise new debt at 10 percent. You are required to calculate the following:- i) The weighted average cost of capital (WACC) of the company. (3 marks) ii) The net present value (NPV) with no floatation cost. (3 marks) ii) The weighted average floatation cost (WAFC). (3 marks) iv) The amount of floatation cost for the proposed financing. (3 marks) v) The net present value (NPV) with floatation cost