Anis Bhd has determined its optimal capital structure that is composed of the following sources and target market value proportions. Debt: The firm can sell a 15-year, RM1,000 par value, 6.5 percent bond for RM970. A flotation cost of 2 percent of the face value would be required in addition to the discount of RM30. Preferred Stock: The firm has determined it can issue preferred stock at RM75 per share par value. The stock will pay a RM10 annual dividend. The cost of issuing and selling the stock is RM4 per share. Common Stock: The firm’s common stock is currently selling for RM18 per share. The dividend expected to be paid at the end of the coming year is RM1.74. Its dividend payments have been growing at a constant rate for the last four years at 4%. It is expected that new common stock issue must be underpriced by RM1 per share and there is an additional RM1 in flotation costs incurred for new issue. Additionally, the firm’s marginal tax rate is 40 percent. You are required to: a. Calculate the firm’s before-tax cost of debt and after-tax cost of debt. b. Calculate the cost of preferred stock. c. Calculate the firm’s cost of retained earnings and cost of a new issue of common stock. d. What is the weighted average cost of capital for the Anis Bhd before and after the retained earnings are exhausted? e. If Anis Bhd decided to change its target market proportion as shown in table below, what will be the new WACC and what is the implication of the change to the common shareholders?