Question
ABB Company has the following capital structure: Source of Capital Market Value (EGP) Cost Common Stock 25,000,000 18.5% Preferred stock 75,000,000 16.5% Bonds 155,000,000 12.5%
- ABB Company has the following capital structure:
| Source of Capital | Market Value (EGP) | Cost |
| Common Stock | 25,000,000 | 18.5% |
| Preferred stock | 75,000,000 | 16.5% |
| Bonds | 155,000,000 | 12.5% |
Calculate the weighted average cost of capital for ABB Company taking into consideration that current Tax Rate is 25%.
- Bank XYZ expects its loan portfolio to grow by 25% during 2021. The bank decides to set its allowance / provision for loan losses at 3% of total loans (total loans = 2.5 billion EGP) at the end of the year. During the year, the bank expects to charge off 10 million EGP. Its allowance for loan losses was 30 million at the beginning of 2021. What is the amount of loan loss provision the bank should keep aside in 2021?
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Commodity Trade And Finance
Authors: Michael Tamvakis
2nd Edition
041573245X, 978-0415732451
