Assignment Exercise 4. You are the finance manager of a Salalah Goods Company and wants to make a decision calculating the financial leverage. Installed capacity = 8000 units Actual Production and sales 50% of the capacity Selling Price = OMR 40 per unit Variable cost=20% of Sales Fixed cost: Under Situation 1 is OMR 20000 Under Situation 2 is OMR 25000 Capital Structure Plan A Plan B Equity OMR 10000 OMR 10000 Bonds 5.7% OMR 10000 Bank Loan 5.75% OMR 10000 a. Kindly suggest which alternative plan of financing is better and why? b. Explain how will the current situation of pandemic Covid-19, effect the company profitability, fixed cost, variable cost and EBIT? Suggest ways to overcome it? Assignment Exercise 2: Dhofar Company is planning to raise 1000000 for constructing a new factory in order to increase its production. The Company's existing capital structure consists of 500 common stocks. The company has following alternative scheme of financing. 1. To issue 5000 common stock @ 100 each AND issue 5000, 8% Bonds @ 100 each II. To issue 5000 10% Preferred Stock @ 100 each AND issue 5000, 9% Bonds @ 100 each The company's EBIT is 300000. The corporate Tax rate is 25% a) Kindly suggest which alternative plan of financing is better and why? b) Assume you are the finance manager of this company and during the current situation of pandemic Covid-19, which financing alternative will you choose and why? c) Assume you are a stockholder in this company with 200 common stocks, how much dividend (part of profit) you will got if company choose Plan 1 or Plan 2