QUESTION 4 (1 5 marks) a) Identify and describe one {1) source of nancing you could explore to raise capital, providing a recent 'real world' example to support your answer (3 marks) (4 b) Two rms are looking to borrow funds from a commercial bank for 10 years. Lambda Ltd has an exceptional credit rating and can borrow at the prime rate. On the other hand, due to some nancial distress recently encountered during COVlD-19, Gamma Ltd's credit rating is prime + 3. The current prime rate is 5.25%. The 30-year Treasury bond yield is 3.67%, 10-year Treasury bond yield is 3.37%, 5-year Treasury bond yield is 3.16%, and the 3-month Treasury bill yield is 2.31%. What are Lambda and Gamma's respective loan rates? {3 marks) +1 c) One of the conditions that the rum propositions required regarding rm capital structure was for there to be no tax. Does the introduction oftax decrease or increase the value of a company? Explain (6 marks) ,_. d) Montana Ltd has $3 million of debt outstanding and $7 million of equity outstanding. The cost of equity is 11.25%, cost of debt is 7.50% and company tax rate is 30%. What is the weighted average cost of capital for Montana Ltd? (3 marks) +1 L