The first question:

A project that needs financing of 200,000 dinars. The following funding structure has been established:

The proposed financing structure

Funding Source Amount of Funding (thousand) Cost of funds rate

60 7% loans

Ordinary shares 90 10%

50 5% equity funds

Required:

1. Calculate the average cost of funds for this financing structure.

2. Calculate the cost of funds in the proposed financing structure.

3. Do you propose a better financing structure than this previous one, to ensure the project has a lower financing cost than the proposed structure?