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Question Ne: 2 The following information were derived from Fujairah Corporation financial plan records for the fimancial year 2020: The Management of the corporation has

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Question Ne: 2 The following information were derived from Fujairah Corporation financial plan records for the fimancial year 2020: The Management of the corporation has strong belief in the contribution of extemal finance in promoting growth and facing competition. The prevailing interest rate is expected to be 7% Tetal Assets-AED 2,000,000,000 Change in Total Assets 20 percent ATO equals 70 percent of the optimal hurdle rate and the profit margin rate is around 15 percent. CA 45 percent of total assets. Financial Leverage 35% Current Liabilities-60 percent of the total liabilities. DPR-65 percent Required: How much to raise from the banks to meet its expected expansion and what would be the 1. case if AU fails to coavince funders as spelled out by Kunt and Maksimovic model. 2. Figare out implications on SFG and SG 3. What would be the effect on SFG and SG if total liabilities equals current liabilities 4 What would be the expected fund needed if the growth rate reduced to 7 percent under the profit retention rate to zero, other things remain the same. Question Ne: 2 The following information were derived from Fujairah Corporation financial plan records for the fimancial year 2020: The Management of the corporation has strong belief in the contribution of extemal finance in promoting growth and facing competition. The prevailing interest rate is expected to be 7% Tetal Assets-AED 2,000,000,000 Change in Total Assets 20 percent ATO equals 70 percent of the optimal hurdle rate and the profit margin rate is around 15 percent. CA 45 percent of total assets. Financial Leverage 35% Current Liabilities-60 percent of the total liabilities. DPR-65 percent Required: How much to raise from the banks to meet its expected expansion and what would be the 1. case if AU fails to coavince funders as spelled out by Kunt and Maksimovic model. 2. Figare out implications on SFG and SG 3. What would be the effect on SFG and SG if total liabilities equals current liabilities 4 What would be the expected fund needed if the growth rate reduced to 7 percent under the profit retention rate to zero, other things remain the same

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