The treasure of a new venture, Stay-up Ventures Bhd, is trying to determine how to raise RM6 million of long-term capital. His investment adviser has devised the alternative capital structure shown below: Alternative A Alternative B RM2,000,000 9% RM4,000,000 12% RM4,000,000 Equity RM2,000,000 Equity If Alternative A is chosen, the firm would sell 200,000 shares of common stock to net RM20 per share. Stockholders would expect an initial dividend of RM1.00 per share and a dividend growth rate of 7 percent. Under Alternative B, the firm would sell 100,000 shares of common stock to net RM20 per share. The expected initial dividend would be RM0.90 per share and the anticipated dividend growth rate 12 percent. Assume that the firm earns a profit under either capital structure and that the effective tax rate is 50 percent; (a) What is the cost of capital to the firm under each of the suggested structures? Explain the result. (Hint: based on the Weighted-average cost of capital, WACC) (b) Explain the logic of the anticipated higher interest rate on debt associated with Alternative B. (c) Is it logical for the shareholders to expect a higher dividend growth rate under Alternative B. Explain your