The following are the information pertaining to the capital structure of a firm: Bonds with a face value of RM1.000, maturity period are 15 years and coupon rate is 9%. Today these bonds are selling for RM850.30 and the underwriting fees is 2% of the par value. 6.5% preferred stock is currently trading at 20 percent below than par value. The cost of issuing this is 4% of the par value. The current market price of the common stock is RM22.50 per share. The annual dividend just paid was RM1.70 per share and the dividend is expected to grow at a constant rate of 5%. The floatation cost of this issue is 3% of the current market price. a) If the corporate tax rate is 40%, calculate each of the cost of capital component. (10 marks) b) Which is the best alternative? Why? (2 marks) c) If the firm has agreed that its optimal capital structure should consist of 30% debt, 20% preferred stock and 50% in equity, calculate the firm's WACC