QUESTION 1 a) The capital structure for the GEN-Z Berhad is provided here: The firm is in a 25% tax bracket and plans to maintain its capital structure in the future. If the firm has a 7% before-tax...

QUESTION 1 a) The capital structure for the GEN-Z Berhad is provided here: The firm is in a 25% tax bracket and plans to maintain its capital structure in the future. If the firm has a 7% before-tax cost debt, a 12% cost of preferred stock, and a 16% cost of common stock, what is the firm’s weighted average cost of capital (WACC)? b) Are preferred stocks a smart investment choice compared to common stocks? Whyor why not?

Extracted text: Capital structure RM’000 Bond 4,000 Preferred Stock 3,000 Common Stock 13,000