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I have the following assignments about financing decision making with the questions: - Clarifying funding structure of the company, giving comments/analysis related to funding priority
I have the following assignments about financing decision making with the questions:
- Clarifying funding structure of the company, giving comments/analysis related to funding priority and maturity matching between financing sources and invested assets - Calculating cost of equity and cost of debt (averaged cost of debt) and Weighted average cost of Capital. How the resulting cost of capital will be considered in the company's future investment.
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FINANCING: Cost Duration matching duration of fund duration of invested assets \begin{tabular}{|l|l|} \hline Assets & Liabilities + Owner equity \\ \hline Shortterm assets & ST liabilities \\ \hline \multicolumn{1}{|c|}{46.9%} & 34% \\ \hline Longterm assets & LT Liabilities + OE \\ \hline 53.1% & 66% \\ \hline \end{tabular} Funding priority \begin{tabular}{|l|c|c|} \hline 1st- retained earning & 67%OE, inwhich 15% retained earning & 1 st \\ \hline 2nd- Debt (LT-->ST) & 0%33%ST & 2 nd \\ \hline 3rd- Stock new issuance & 0% & \\ \hline \end{tabular}Step by Step Solution
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