Use the following information about Fresh Ltd.'s capital structure to answer the questions below. Fresh's capital structure is made up of: - Fresh Ltd. has 80,000 bonds outstanding with a face value of $100 each. These bonds have 5 years to maturity and pay an annual coupon of 7.5%. Fresh's statutory corporate tax rate is 30%. - Standard and Poor Corporation is one of a big ratings agency which has given Fresh Ltd. a debt rating of AA. The following table shows the current yields available in the market based on debt ratings. - The risk-free rate is 2%. - Fresh Ltd.has issued 4 million preference shares, which pay an annual dividend per share of $0.375. They are currently trading at $3 each. - Fresh Ltd. has issued 8 million ordinary shares, which are currently trading at $5 each. Shareholders are to receive a dividend of $0.80 per share in the current year, and this dividend is estimated to grow at a constant rate of 2.5% in perpetuity. NOTE: Round all dollar amounts to the nearest dollar and all percentages to two decimal places. (i) What is Fresh's after-tax cost of debt? (1 Mark) (ii) What is the value of Fresh's bonds? (1 Mark) (iii) What is the market value of Fresh's preference shares? (1 Mark) (iv) What is Fresh's cost of preference shares? (1 Mark) (v) What is the market value of Fresh's ordinary shares? (1 Mark) (vi) What is Fresh's cost of ordinary shares? (1 Mark) (vii) What is Fresh's WACC (Weighted Average Cost of Capital)? (2 Marks) (viii) Assume the preference shares issued by Organic Ltd. are cumulative. Assume the company doesn't pay any dividends this year on both Preference and Ordinary Shares. Nonetheless, next year, the company estimates that \$2 million will be available to be paid out as dividends. Calculate the dividends per share the ordinary shareholders are expectec to receive next year? (2 Marks) (Total 10 Marks) Use the following information about Fresh Ltd.'s capital structure to answer the questions below. Fresh's capital structure is made up of: - Fresh Ltd. has 80,000 bonds outstanding with a face value of $100 each. These bonds have 5 years to maturity and pay an annual coupon of 7.5%. Fresh's statutory corporate tax rate is 30%. - Standard and Poor Corporation is one of a big ratings agency which has given Fresh Ltd. a debt rating of AA. The following table shows the current yields available in the market based on debt ratings. - The risk-free rate is 2%. - Fresh Ltd.has issued 4 million preference shares, which pay an annual dividend per share of $0.375. They are currently trading at $3 each. - Fresh Ltd. has issued 8 million ordinary shares, which are currently trading at $5 each. Shareholders are to receive a dividend of $0.80 per share in the current year, and this dividend is estimated to grow at a constant rate of 2.5% in perpetuity. NOTE: Round all dollar amounts to the nearest dollar and all percentages to two decimal places. (i) What is Fresh's after-tax cost of debt? (1 Mark) (ii) What is the value of Fresh's bonds? (1 Mark) (iii) What is the market value of Fresh's preference shares? (1 Mark) (iv) What is Fresh's cost of preference shares? (1 Mark) (v) What is the market value of Fresh's ordinary shares? (1 Mark) (vi) What is Fresh's cost of ordinary shares? (1 Mark) (vii) What is Fresh's WACC (Weighted Average Cost of Capital)? (2 Marks) (viii) Assume the preference shares issued by Organic Ltd. are cumulative. Assume the company doesn't pay any dividends this year on both Preference and Ordinary Shares. Nonetheless, next year, the company estimates that \$2 million will be available to be paid out as dividends. Calculate the dividends per share the ordinary shareholders are expectec to receive next year? (2 Marks) (Total 10 Marks)