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Cairo Corporation is operating business in the MENA region. The financial risk of the corporation as have been expressed by financial Gearing and Equity multiplier

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Cairo Corporation is operating business in the MENA region. The financial risk of the corporation as have been expressed by financial Gearing and Equity multiplier is 1.825 and 2.185 respectively. The capitalization of the corp. on 1st Jan 2023 was around $50000000. The strategy GR in 2023 is expected to be 20%. Due to stagflation and post Covid-19 economic downturn, the change in total asset has been adjusted negatively by 26%. The capitalization profile constitutes fixed assets intensity of 40%; long-term investments of 5,000,000, which equals 500% of its intangible assets and current assets. The corporation has successfully raised in 2022, $9,600,000 as long-term Debt from Cairo National Bank. With respect to efficiency and profitability, the ATO is deviating negatively from the optimal point by 32% and a profit margin of 12%. To strike a balance between enhancement of equity base and shareholders' satisfaction, the corporation enforces a profit retention rate, which equals 130% of DPR. The prevailing nominal interest rate in Egypt is 18%. Required: A. Based on Kunt and Maks Model, you have been requested to develop the financial scene of the corporation. Your critical assessment of the derived results is of a great concern to the management. B. What would the EFN if the Co. adopt the designated (strategy growth rate) and the associated cost of finance, provided that ATO will soar up by 15%. Other things remain the same. C. What will be equal debt finance if the corporation ran into losses of $6,000,000, provided that GR is 18%. Give concise comparison with part (A)

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