swebdav/pid-2153467-dt-content-rid-60692051/ courses/2020-1-BBA-B2-FIN-002-E-L-MRS-O-3 PROBLEM 2 - Financing Choice (15 marks) Med5000inc, has been isted on Turonext compartment since 2005 The most recent stock price is 13 euros. The Company was founded in 1992 by acques Martin who is still the CEO and chairman of the board of directors The Mat family holds one of the company ownership and voting nights. Med500 belongs to a research intensive industry with significant investments in R&D projects. The Table below shows recent financial data about Med5000 2019 125 350 40 9 J4 30 3 12 2013 115 330 38 8 30 28 11 Data in millions (0) Shareholders' Equity Total Assets Financial Debt Cash and Cash equivalents Profit from recurring operations Operating Profit Net cost of financial debit Average stock price Outstanding shares in millions) RATIOS Equity/Total Assets Financial Debt/Equity Net Debt/Equity Net Debt/profit from recurring operations Operating profit. Net cost of financial debe Cash/Total Assets INDUSTRY DATA Net Debt/Profit from recurring operations 63 35.7% 0.32 0.25 34.8% 0.33 0.26 1.00 9.33 2.4% 0.91 10.00 2.6% 1.9 1.8 REQUIRED The company in considering a new investment project whose value represent 30% of total equity. The company's CEO is contemplating two alternative financing sources (1) use of financial debt to fund the projector (2) new share issue capital increase)either in the forma rights offering issue with rights or a regular share le without preferential subscription rights to existing shareholders Among the two financing alternatives, which one would you recommend to Medco inc? You need to quantify the company's financing need, valable debt capacity, the new share pe price and the number of shares to be led with rights or without right. Your anwer should also discuss the pros and cons of the two financing alternatives to Med5000 inc. and explain which option you recommend to the company Your answer should be fully justified and not exceed 12 lines. O II ASUS ZenBook swebdav/pid-2153467-dt-content-rid-60692051/ courses/2020-1-BBA-B2-FIN-002-E-L-MRS-O-3 PROBLEM 2 - Financing Choice (15 marks) Med5000inc, has been isted on Turonext compartment since 2005 The most recent stock price is 13 euros. The Company was founded in 1992 by acques Martin who is still the CEO and chairman of the board of directors The Mat family holds one of the company ownership and voting nights. Med500 belongs to a research intensive industry with significant investments in R&D projects. The Table below shows recent financial data about Med5000 2019 125 350 40 9 J4 30 3 12 2013 115 330 38 8 30 28 11 Data in millions (0) Shareholders' Equity Total Assets Financial Debt Cash and Cash equivalents Profit from recurring operations Operating Profit Net cost of financial debit Average stock price Outstanding shares in millions) RATIOS Equity/Total Assets Financial Debt/Equity Net Debt/Equity Net Debt/profit from recurring operations Operating profit. Net cost of financial debe Cash/Total Assets INDUSTRY DATA Net Debt/Profit from recurring operations 63 35.7% 0.32 0.25 34.8% 0.33 0.26 1.00 9.33 2.4% 0.91 10.00 2.6% 1.9 1.8 REQUIRED The company in considering a new investment project whose value represent 30% of total equity. The company's CEO is contemplating two alternative financing sources (1) use of financial debt to fund the projector (2) new share issue capital increase)either in the forma rights offering issue with rights or a regular share le without preferential subscription rights to existing shareholders Among the two financing alternatives, which one would you recommend to Medco inc? You need to quantify the company's financing need, valable debt capacity, the new share pe price and the number of shares to be led with rights or without right. Your anwer should also discuss the pros and cons of the two financing alternatives to Med5000 inc. and explain which option you recommend to the company Your answer should be fully justified and not exceed 12 lines. O II ASUS ZenBook
