Source Weight Debt 40 Before/After Tax Cost (%) Before tax cost = 5.00 Before tax cost = 8.00 10.00 13.00 18.00 20.00 Preferred Share Range (RM) 0-500,000 Above 500,000 0-700,000 Above 700,000 0-1,000,000 Above 1,000,000 20 Common Share 40 Gordon Company is estimating an optimal capital structure for a new project. The current cost of financing is as follows: Assume tax cost of 35%, you are required to answer the following: 1. Calculate the after-tax cost for bond 2. Calculate breaking points for preferred share 3. What are the new ranges of financing associated with each source of financing. 4. Determine the firm's weighted cost of capital. 5. What is the weighted cost of capital if the company wants to raise fund of RM3 million? 6. Should the company accept the project if the project cost RM1.5 million which contribute to 10 percent rate of return