Tarkes QUESTION FOUR A. Discuss whether changing the capital structure of a company can lead to a reduction in its cost of capital and hence to an increase in the value of the company. (10 marks) B.ABC LTD has recently taken out a new variable rate bank loan to fund an expansion programme into the East Africa. The capital structure of the company is now as follows: i. TZS 400m nominal value of 50c shares trading at TZS 2.30 - ABC LTD has an equity beta of 1.1. ii. TZS 600m nominal value of 6% irredeemable loan notes trading at TZS 107. TZS 100m variable rate bank loan the current interest charge is 5%. The directors of ABC LTD are keen to know what the weighted average cost of capital has now become in order o cyaluat