Question
Samos Company wanted to get listed for an IPO. The company wanted to maintain a capital structure in which 30% is finance by debt with
Samos Company wanted to get listed for an IPO. The company wanted to maintain a capital structure in which 30% is finance by debt with the cost of debt of 8% and the rest with stockholder equity with required return of 12%. The company has projected its next year operating cash flow of RM70 million. Its investment into plant, property, and equipment as well as net working capital is RM40 million. It expected that its growth rate to be at 4% in perpetuity. The companys tax rate is at 30%. Find the companys
i.)Weighted average cost of capital.
ii.)The total value of Samos company
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