managerial finance

QUESTION 2 Whorongo (PV) Ltd. (hereafter Oharongo) is Namibia's anly cement-producing company and owns one of the most modem cement plants in Africa If was constructed over the course of two vears by leading international enginecring company Polysius, with local companies involved in the provlsian of infratructure-and the building of evill works, at a total initial inventment of NS2.5 bilion. Since then, the company invented further into -a composite cement plant and a third packaning line, and a new depot in Oridagiva, bringing the tatal investrment te date in encess of NS3 billion. Ohorongs commenced production in Decomber 2010 and has a current production tepacity in excess of a million tomets of high-qualiby cement annually, for both jocal consumption and special projects. All raw materials required for the production process are sourced in Namibia and the entire value chain Inkes place within the country, which rinkes Ohorsnge products 100% proudly Namibian product. Ohorongo has aq equity beti of 1.10 (based on similar listed company aftar makind dif necussary adjustments). the market risk premium in Numibia is expected to be 5y and the vleld on the Namibian governmitnt bonds has been and remains at 75\%. The coropany has isued N510 million worth of N5100 par value bonds to finance an excavat is project for raw materitls. The bonds whose couson rate is 8% are currently giving a yield to maturity af 125 and they are redetmable in five vears. The tax rate is 28% interert on the bocads is pald annually in arrears and the company just paid the coupon for the current veas, Heceqthy, Ohorongo paid dividend of N50.12 per share which is expected to grow at 75 indefinitely. The compony's shure price is N52,30