Question 2: Tanjung Murni Hotel The capital structure component of Tanjung Murni Hotel is as follows: Capital structure component Long-term bank loan Irredeemable Bond Ordinary shares Book value in RM1000 4.550 9,000 15,000 Additional information: i. The bank loan carries a 7% interest. The tax rate is 25%. ii. The bond is currently traded at RM2.15 per unit. The face value of the bond is RM1.00. The interest paid on the bond per unit is RM0.13 ii. The beta of Tanjung Murni is 1.2. The risk free rate of return is 9% and the return on the market is 16%. iv. The ordinary shares is currently traded at RM1.85 a) Calculate the after tax cost of bank loan. (3 marks) b) Calculate the after tax cost of irredeemable bond. (4 marks) . Calculate the cost of equity using the CAPM formula. (5 marks) d) Calculate the weighted average cost of capital of the Tanjung Murni Hotel using market values. (8 marks)