- No Excel Cals Pls Pls Show All Cals Thanks 1 (97.87 KiB) Viewed 25 times
No Excel Cals pls, pls show all cals, thanks
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No Excel Cals pls, pls show all cals, thanks
No Excel Cals pls, pls show all cals, thanks
3. 4. Give the rationale In finance theory, what is the most widely accepted goal of value of a project relate to this goal? Question 2 (25 Marks) The total assets of $900,000 of a company have been financed at present entirely by equity shares of $30 each. There is a proposal to reduce the equity base to 60% by way of taking long-term loan @13% p.a. interest as available in the market. Evaluate the above proposal, given the following details: Projected earnings before interest and taxes (EBIT): EBIT($) 40,000 75,000 110,000 Probability 0.25 0.45 0.30 Payout: 100% Tax rate: 31% Risk free rate of return: 5% pa Average market risk: 16% Average market rate of return: 7% pa Note: Since Beta is not given, but with given market risk, expected return could be determined as follows:-Expected Return = R$ + (Avg Market Return - R/)/Avg Market Risk x SD of EPS) Question 3 (12 Marks) An investor places 30% of his funde in
3. 4. Give the rationale In finance theory, what is the most widely accepted goal of value of a project relate to this goal? Question 2 (25 Marks) The total assets of $900,000 of a company have been financed at present entirely by equity shares of $30 each. There is a proposal to reduce the equity base to 60% by way of taking long-term loan @13% p.a. interest as available in the market. Evaluate the above proposal, given the following details: Projected earnings before interest and taxes (EBIT): EBIT($) 40,000 75,000 110,000 Probability 0.25 0.45 0.30 Payout: 100% Tax rate: 31% Risk free rate of return: 5% pa Average market risk: 16% Average market rate of return: 7% pa Note: Since Beta is not given, but with given market risk, expected return could be determined as follows:-Expected Return = R$ + (Avg Market Return - R/)/Avg Market Risk x SD of EPS) Question 3 (12 Marks) An investor places 30% of his funde in
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