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It found that the above project is 45% debt financed and the same is followed for all the projects. The Cash flow generated for each
It found that the above project is 45% debt financed and the same is followed for all the projects. The Cash flow generated for each unit of the project is 10% of the stock price of the company which is 11.23 times of the overall value of the project. The total common shareholders are 135000. With an expected growth rate of 6.3%
1-Suggest what will be the return of Equity ?
( answer must me typed)
\begin{tabular}{|l|r|r|} \hline Year & Unit Sales & \\ \hline & 1 & 34716 \\ \hline & 2 & 35397 \\ \hline 3 & 34611 \\ \hline & 4 & 35502 \\ \hline & 5 & 35845 \\ \hline & 6 & 35620 \\ \hline Sales price & 7 & 34859 \\ \hline & 8 & 35454 \\ \hline Drop Percentage & & \\ \hline & & \\ \hline Variable Price & & 8 \\ \hline & & \\ \hline & & 0.15 \\ \hline Administrative Expense & & \\ \hline Utilities Expense & & 4.1 \\ \hline \end{tabular} \begin{tabular}{|l|r|r|} \hline Year & Unit Sales & \\ \hline & 1 & 34716 \\ \hline & 2 & 35397 \\ \hline 3 & 34611 \\ \hline & 4 & 35502 \\ \hline & 5 & 35845 \\ \hline & 6 & 35620 \\ \hline Sales price & 7 & 34859 \\ \hline & 8 & 35454 \\ \hline Drop Percentage & & \\ \hline & & \\ \hline Variable Price & & 8 \\ \hline & & \\ \hline & & 0.15 \\ \hline Administrative Expense & & \\ \hline Utilities Expense & & 4.1 \\ \hline \end{tabular}Step by Step Solution
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