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Arranged the following sources of funding: $200,000 from a five year fixed interest loan whose annual loan payments are $48,126.91 $250,000 from a 5 year
Arranged the following sources of funding:
- $200,000 from a five year fixed interest loan whose annual loan payments are $48,126.91
- $250,000 from a 5 year zero-coupon bond with a face value of $350,000
- $300,000 from an ordinary share issue where a dividend of $18,000 will be paid in one year and is expected to grow at 3% per annum
- $250,000 from a 5 year coupon-paying bond issue who coupon rate is 7% and face value is $250,000
How do you work out what is the discount rate given above sources of financing?
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