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Answer all these questions ( IF you want to use EXCAL please show the formulas) THANK YOU 2- 3- 1. An investment of SAR 50,000
Answer all these questions ( IF you want to use EXCAL please show the formulas)
THANK YOU
2-
3-
1. An investment of SAR 50,000 generates the following cash flows for a capital project, calculate the NPV. The cost of capital is 7 percent. The payback period of this investment is;(Note write answer in numbers with year) Year 1 2 3 4 5 Cash flow 15,00015,00020,00010,0005,000 Market Price per Unit Dividend Paid / Annual Interest Paid Total Market Value of Capital Structure for each source Source of Financing and Information Bond (Debt) Face value = 1000 Maturity = 8 years Preferred Stock Common Stock SR 670.00 0 SR 12 million SR 30.00 SR 40.00 SR 3.00 SR 4.00 SR 10 million SR 18 million TOTAL MARKET VALUE OF FINANCING SR 40 million Besides the information above, SFC expects the DIVIDEND FOR COMMON STOCK TO GROW AT A CONSTANT RATE OF 5% per year and its corporate TAX RATE IS 20%. Calculate the AFTER-TAX COST OF DEBT (ki) assuming SFC's bonds are its only debt. (Hint: START WITH CALCULATION OF COST OF DEBT BEFORE TAX. kd). (Note Write answer with percentage sign i.e 10.5% as 10.5) The preferred stock of Arabian Pipes Co. (APC) sells for $45 and pays 5 percent dividends. The net price of the stock is $42. What is the cost of capital for the preferred stock? (Write answer without percentage sign i.e. 10.5% as 10.5)Step by Step Solution
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