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some formula helping in solution 1. Calculate the value of the weighted average cost of capital for a firm that operates in Saudi with 2

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1. Calculate the value of the weighted average cost of capital for a firm that operates in Saudi with 2 billion assets, where half a billion was financed by debts. Note that the cost of its debt is 2% and the return on equity is 5%. (2 scores) 2. If the cost of equity (r) is 5%, what is the present value of a stock that earns an annual return of 10 SAR and grows at 1% annually? (2 scores) 3. If the market return is 8% and the risk-free return is 3%. What is the return on share if its covariance with the market is 0.05 and the market variance is 0.04? (2 scores) 4. If required rate of return is 8% and the annual dividend is 12 SAR, what is the price of preferred stock? (2 scores) 5. A company issued new bonds that last for 10 years, with par value (principle payment) of 1000 SAR and annual interest payment of 5% of bond's face-value. a. Calculate the present value of the bond. b. Calculate the Bond Yield if the interest in bonds market increased to 7%. Cost of Capital Cost of Debt 1 Measured by interest rate, or yield, paid to bondholders Cacan complex and predia Income Art Brand Cat honda- Post of New Asigheruming the red of rum of Solders is expected Need web To determine the cost of a new debe in the marketplace The form wil.com ayol ona ing Ski Claus . M The desire to win Cette Cost of Common Equity where approch? In the cost of common to the 2 ks (conto debe Y-1) bored - Cost of Preferred Stock 2) Academy * Where Capitale pricing (CAPM) K-K, Required to rate of rum, y recurrent rate on Treasury Dil Bata coefficient measures the historically of an individual stocks returretive to a stock mantidotum in the measured by an primated Cost of Retained Earnings Sources of capital for common stock equity Pure + w tym yen de qke plans po An

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