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John's share price is currently at RM20 with him holding 60 million shares. The CEO was thinking of raising RM400 million in SEO, however, the

  1. John's share price is currently at RM20 with him holding 60 million shares. The CEO was thinking of raising RM400 million in SEO, however, the underwriters will charge a 6% fee. If all these stocks are designated sold to the investors, so what percentage of share the company John owns?
  2. Rahman needs to raise RM45 million to embark on a new project. The company targeted capital structure of 45% common stock, 5% preferred stock and 50% debt. The administrative and underwriter fees are 4%,5% and 6& respectively. What its the gross amount he actually needs to raise for the new project after taking consideration the cost it has incurred?
  3. ABC Berhad wanted to get into selling dates. It plans to develop the date manufacturing plant by using debt financing of 25% and the rest using equity. The company just issued debt at 103.4. percent of its par value, with cuopon rate of 6& with 5 years maturity. It is using a comparable firm's beta of 1.25. The risk-free rate is at 3 percent and the market rate is 12% . Its tax rate is 35%. Compute what is the company's wacc?
  4. These are the details for ABC firm. Expected to produce a cash flow of RM95 million the current year. Next 3 year to grow at 20%. After that the next 3 years at 10%. Followed by a growth rate of 5 years until eternity at 5%. Assuming its weighted cost of goods sold at 15%. It carries a debt of RM250 million and has 125 million shares with a preferential share of RM20 million. The question is what is ABC firm share price.
  5. ABC firm currently has a dividend of RM3 and expect divided to be growing 5% for the next 3 years and after that by 3% forever. the cost of capital is at 8%. What is the price ABC firm should look currently?
  6. XYZ firm expects its cash flow would decrease by RM100 million and RM120 million in the next 2 years. If it has cost of capital 15% and outstanding stock of 60million, how much decline in the stock price would the company experience upon the news becomes public. Currently, it is trading at RM20 and what is the highest you would pay for the stock now?
  7. the portfolio risk level is equivalent with market risk. Assume that you would like to combine Stock A with a beta of 1.3 with treasury bill. SO what is the percentage you need to invest in Stock A in this portfolio?

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