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You have been provided with the following information for ABC limited as at 3 1 st December 2 0 2 3 . The company recorded

You have been provided with the following information for ABC limited as at 31st December 2023. The company
recorded revenues of Sh.50 Million and the profit margin was 25%. Capital expenditure for the period was Sh.2 Million
and depreciation value was Sh.1 Million. Working capital investment for the period equal to 5% of revenues level in
that year. The firm expects Revenues, Net Income, Interest expense, Capital Expenditure, Investment in Working Capital
and Depreciation to grow at an annual rate of 20% each year for 5 years. After the five year growth period, growth in
Revenues, Net Income, Depreciation Interest expense, Investment in Working Capital will decline to stable 3% each year
into the foreseeable future and Capital expenditure and Depreciation will offset each other. ABC limited has 2 million
of ordinary shares outstanding and 14% interest bearing long term debt whose par value is Sh.4 Million. The average
cost of capital for t. he company has been estimated to be 18% during the high growth stage and 12% during the steady
state. Calculate the value of the company and its equity using the Free Cash Flow to Equity Model (FCF)
A bond today is selling for $ 900. The Bond has a face Value of $ 1,000 and matures in five years time. The bond has a coupon interest rate of 10% and it pays interest on a semi-annual Basis.
What is its yield to Maturity:

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