So questions 5 and 4.

Do question 5

Bond (par) USD s SI, S50,000,000 $1.350.000.000 $850,000,000 SI,250,000,000 uponCall Premium Maturity 3.25 3.00 Year 6 20 .00 Years 2.504 .004 Years 2500 NA Years Should Slonim refinance any of its bonds, all of its bonds, none of its bonds, or some of its bonds? Show your work 4. What is the Book Value of Slonim's equity? 5. Calculate Slonim's value prior to any refinancing, and post any refinancing. Assume all bonds trade at par. Use simple CAPM to derive the cost of equity capital. Use any measure in the text to calculate the value of Slonim e.g., DCF, ROPI. For the sake of this exam, discount cashflows using WACC. Show your WACC calculation. FINANCIALS SLONIM CORPORATION-CONSOLIDATED BALANCE SHEETS- USD Sin Millions Preferred when Ordinary a bed par value per S000 per veur 100 e-12 000 hod three Acumuland delic Total Shareholders' Equity Total babes and Shareholder' quity Bond (par) USD s SI, S50,000,000 $1.350.000.000 $850,000,000 SI,250,000,000 uponCall Premium Maturity 3.25 3.00 Year 6 20 .00 Years 2.504 .004 Years 2500 NA Years Should Slonim refinance any of its bonds, all of its bonds, none of its bonds, or some of its bonds? Show your work 4. What is the Book Value of Slonim's equity? 5. Calculate Slonim's value prior to any refinancing, and post any refinancing. Assume all bonds trade at par. Use simple CAPM to derive the cost of equity capital. Use any measure in the text to calculate the value of Slonim e.g., DCF, ROPI. For the sake of this exam, discount cashflows using WACC. Show your WACC calculation. FINANCIALS SLONIM CORPORATION-CONSOLIDATED BALANCE SHEETS- USD Sin Millions Preferred when Ordinary a bed par value per S000 per veur 100 e-12 000 hod three Acumuland delic Total Shareholders' Equity Total babes and Shareholder' quity any refinancing. Assume all bonds trade at par. Use simple CAPM to derive the cost of equity capital. Use any measure in the text to calculate the value of Slonim e.g., DCF, ROPI. For the sake of this exam, discount cashflows using WACC. Show your WACC calculation. $5,224 1053 7,342 1.869 7,681 1.792 1.225 1212 1.217 191 12.781 11264 1728 FINANCIALS SLONIM CORPORATION-CONSOLIDATED BALANCE SHEETS- USD ISIS in Millions Current assets Cash and cash equivalents Accounts receivable, net Inventories Other current assets Total current assets Property, equipment and leasehold improvements, net Investment in debt security Goodwill Other intangible assets, net Deferred income taxes Other a s net Total Assets Current abilities: Accounts payable Accrued employee compensation Accrued warranty Current portion of long-term debt Accrued expenses Total current abilities Long term accrued warranty Long-term accrued income taxes Other non-current abilities Long-term de c urrent portion Totalities Slonim Corporation shareholders' equity Preferred shares. $0 0001 per value per share100.000 authorized Ordinary Whares 50 000 per le pershare-1250 000 000 author Additional din capital Acu ted other comprehensive loss Accumulated defickt Total Shareholders Equity Total and Shareholders' Equity 5.000 555 4349 $12. Year 1 Year o $ 11, 184 7,820 1,026 562 SLONIM CORPORATION-CONSOLIDATED STATEMENTS OF OPERATIONS- USD ($), shares in Millions Income Statement Revenue Cost of revenue Product development Marketing and administrative Amortization of intangibles Restructuring and other, net Total operating expenses Income from operations Interest income Interest expense Other, net Other expense, net Income before income taxes (Benefit) provision for income taxes Net income Net Income per share: Basic (in dollars per share) Diluted (in dollars per share) Number of shares used in per share calculations: Basic (in shares) Diluted in shares) Cash dividends declared per ordinary share $ 12,023 $ 8,407 $ 1,103 453 23 (22) 9,963 2,059 84 (158) 25 (115) 1,896 (640) $ 2,536 9,550 1,634 84 (18) (216) 1.484 236 $ 1,248 $8.99 $ 8.90 $4.10 $ 4.05 282 285 $ 2.52 288 292 $ 2.52 QUESTIONS AND PROBLEMS 1. Calculate Slonim's annual interest cost (show your work) 2. Calculate the value of a Basis Point i.e., the change in interest cost with a basis point change in rates. 3. Between Year Zero and Year 1, the Fed has been following a regime of monetary easing. Slonim's bankers believe Slonim could refinance its debt and realize substantial cost savings. They present Slonim with the following profile of its debt after a refinancing. Bond (par) USD ($) Coupon Maturity $1,550,000,000 $1,350,000,000 $850,000,000 $1,250,000,000 3.25% 2.50% 2.50% 2.50% Call Premium 3.00% 1.00% 1.00% N/A Year 6 Year 5 Year 5 Year 5 Should Slonim refinance any of its bonds, all of its bonds, none of its bonds, or some of its bonds? Show your work. 4. What is the Book Value of Slonim's equity? 5. Calculate Slonim's value prior to any refinancing, and post any refinancing. Assume all bonds trade at par. Use simple CAPM to derive the cost of equity capital. Use any measure in the text to calculate the value of Slonim e.g., DCF, ROPI. For the sake of this exam, discount cashflows using WACC. Show your WACC calculation. Bond (par) USD s SI, S50,000,000 $1.350.000.000 $850,000,000 SI,250,000,000 uponCall Premium Maturity 3.25 3.00 Year 6 20 .00 Years 2.504 .004 Years 2500 NA Years Should Slonim refinance any of its bonds, all of its bonds, none of its bonds, or some of its bonds? Show your work 4. What is the Book Value of Slonim's equity? 5. Calculate Slonim's value prior to any refinancing, and post any refinancing. Assume all bonds trade at par. Use simple CAPM to derive the cost of equity capital. Use any measure in the text to calculate the value of Slonim e.g., DCF, ROPI. For the sake of this exam, discount cashflows using WACC. Show your WACC calculation. FINANCIALS SLONIM CORPORATION-CONSOLIDATED BALANCE SHEETS- USD Sin Millions Preferred when Ordinary a bed par value per S000 per veur 100 e-12 000 hod three Acumuland delic Total Shareholders' Equity Total babes and Shareholder' quity Bond (par) USD s SI, S50,000,000 $1.350.000.000 $850,000,000 SI,250,000,000 uponCall Premium Maturity 3.25 3.00 Year 6 20 .00 Years 2.504 .004 Years 2500 NA Years Should Slonim refinance any of its bonds, all of its bonds, none of its bonds, or some of its bonds? Show your work 4. What is the Book Value of Slonim's equity? 5. Calculate Slonim's value prior to any refinancing, and post any refinancing. Assume all bonds trade at par. Use simple CAPM to derive the cost of equity capital. Use any measure in the text to calculate the value of Slonim e.g., DCF, ROPI. For the sake of this exam, discount cashflows using WACC. Show your WACC calculation. FINANCIALS SLONIM CORPORATION-CONSOLIDATED BALANCE SHEETS- USD Sin Millions Preferred when Ordinary a bed par value per S000 per veur 100 e-12 000 hod three Acumuland delic Total Shareholders' Equity Total babes and Shareholder' quity any refinancing. Assume all bonds trade at par. Use simple CAPM to derive the cost of equity capital. Use any measure in the text to calculate the value of Slonim e.g., DCF, ROPI. For the sake of this exam, discount cashflows using WACC. Show your WACC calculation. $5,224 1053 7,342 1.869 7,681 1.792 1.225 1212 1.217 191 12.781 11264 1728 FINANCIALS SLONIM CORPORATION-CONSOLIDATED BALANCE SHEETS- USD ISIS in Millions Current assets Cash and cash equivalents Accounts receivable, net Inventories Other current assets Total current assets Property, equipment and leasehold improvements, net Investment in debt security Goodwill Other intangible assets, net Deferred income taxes Other a s net Total Assets Current abilities: Accounts payable Accrued employee compensation Accrued warranty Current portion of long-term debt Accrued expenses Total current abilities Long term accrued warranty Long-term accrued income taxes Other non-current abilities Long-term de c urrent portion Totalities Slonim Corporation shareholders' equity Preferred shares. $0 0001 per value per share100.000 authorized Ordinary Whares 50 000 per le pershare-1250 000 000 author Additional din capital Acu ted other comprehensive loss Accumulated defickt Total Shareholders Equity Total and Shareholders' Equity 5.000 555 4349 $12. Year 1 Year o $ 11, 184 7,820 1,026 562 SLONIM CORPORATION-CONSOLIDATED STATEMENTS OF OPERATIONS- USD ($), shares in Millions Income Statement Revenue Cost of revenue Product development Marketing and administrative Amortization of intangibles Restructuring and other, net Total operating expenses Income from operations Interest income Interest expense Other, net Other expense, net Income before income taxes (Benefit) provision for income taxes Net income Net Income per share: Basic (in dollars per share) Diluted (in dollars per share) Number of shares used in per share calculations: Basic (in shares) Diluted in shares) Cash dividends declared per ordinary share $ 12,023 $ 8,407 $ 1,103 453 23 (22) 9,963 2,059 84 (158) 25 (115) 1,896 (640) $ 2,536 9,550 1,634 84 (18) (216) 1.484 236 $ 1,248 $8.99 $ 8.90 $4.10 $ 4.05 282 285 $ 2.52 288 292 $ 2.52 QUESTIONS AND PROBLEMS 1. Calculate Slonim's annual interest cost (show your work) 2. Calculate the value of a Basis Point i.e., the change in interest cost with a basis point change in rates. 3. Between Year Zero and Year 1, the Fed has been following a regime of monetary easing. Slonim's bankers believe Slonim could refinance its debt and realize substantial cost savings. They present Slonim with the following profile of its debt after a refinancing. Bond (par) USD ($) Coupon Maturity $1,550,000,000 $1,350,000,000 $850,000,000 $1,250,000,000 3.25% 2.50% 2.50% 2.50% Call Premium 3.00% 1.00% 1.00% N/A Year 6 Year 5 Year 5 Year 5 Should Slonim refinance any of its bonds, all of its bonds, none of its bonds, or some of its bonds? Show your work. 4. What is the Book Value of Slonim's equity? 5. Calculate Slonim's value prior to any refinancing, and post any refinancing. Assume all bonds trade at par. Use simple CAPM to derive the cost of equity capital. Use any measure in the text to calculate the value of Slonim e.g., DCF, ROPI. For the sake of this exam, discount cashflows using WACC. Show your WACC calculation