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A. PROBLEMS *1. Chamoun produces Sharma and stuffed grape leaves. It has the following capital structure. Its debt is $600m and its equity is $400M.

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A. PROBLEMS *1. Chamoun produces Sharma and stuffed grape leaves. It has the following capital structure. Its debt is $600m and its equity is $400M. Its risk free rate is 3%, while the expected return of the market is 10%, and its beta is 1.2. It pays taxes at the 40% rate and its yield to maturity is 6%. Miray intends to invest $350 million into a sharma project wanting to become the biggest seller in the American continent. Thus, it expects to receive $100m EBIT annually for 30 years on this investment. For the grape leaves project, Chamoun will invest $S250 million and receive $150m annually, in terms of operating profit. The depreciation is straight line for 30 years for both projects. It will pay $24 million interest yearly and $6 million yearly on increased net working capital. Compute the value of Chamoun

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