Part A |15 Marks Surya Ltd recently got listed on the South Pacific Stock Exchanoe (SPX). The target financing y 1S20o preference shares, 359% debt and the remainder being ordinauy equity. The corporate tax rate is 30%. Ihe preference shares can be issued at $3.20 with the annual dividend being S0.32 fully ign quality bonds with a S100 face value can be issued at $98. The coupon rate is 10/o. Paa annuaily. The flotation costs will be 3.5%, The bonds will mature in 7 years. Use e p franked. The flotation costs will be 4%. cOrdinary shares are currently trading at $7.70 and ew shares would be 15suc nal dividend is expected to be S0.80 and will be fully franked. As Surya LLtd 15 a pany, the current growth rate of 1.5% is expected to continue indefinitely. 1ne 1iOtaton costs will be 4%. The company has a retained earnings balance of $12 nmillion and this is all being utilised in current operations. approximate cost of debt equation to determine the cost of bonds Surya Ltd's shareholders are all local investors. Required: Calculate the Weighted Average Cost of Capital (WACC) for Surya Ltd, showing calculations. Part B |10 Marks] Scenario I John was recently appointed as a director on the board of Fijian Holdings Limited (F his fist board meeting John hears others talking about "optimal capital structure, Scenario2 Mr.Cama has been working in a printing fim for about seven years some cash and has been seeking advice from friends ovan cash Requ