Stargate Nation Sdn Bhd operates a very successful manufacturing plant in Batu Kawan Industrial Area.The company needs to raise funds for its planned expansion into the Northern Part of Malaysia. The firm'sbalance sheet at the close of 2021 appeared as follows:CashAccountsReceivableInventoriesNet Plant andEquipmenta.Total AssetsRM 2,210,000+4,380,000+11,540,00032,575,000+RM 50,705,000*Long-termDebt (Bond)CommonEquity4Total Debtand EquityRM 18,341,000+32,364,000*RM 50,705,000The company's management estimates that the market requires 16 percent return on its common stock,the firm's bonds command a yield to maturity of 8.5 percent, and the firm faces a tax rate of 33 percent.At the end of the previous year Stargate Nation's common stock was selling for a price 1.6 times its bookvalue, and its bonds were trading near their par value.<Calculate the cost of capital for Stargate Nation Sdn Bhd.<

Step 1 The minimum rate of return or profit that a business must achieve before creating value is…

irgate Nation atu Kawan trial Ar The company needs to raise funds for its planned expansion into the Northern Part of Malaysia. The firm's balance sheet at the close of 2021 appeared as follows: Cash Accounts Receivable Inventories Net Plant and Equipment له Total Assets RM 2,210,000+ 4,380,000+ 11,540,000+ 32,575,000+ RM 50,705,000€ Long-term Debt (Bond) Common Equity Total Debt and Equity RM 18,341,000+ Calculate the cost of capital for Stargate Nation Sdn Bhd. 4 32,364,000+ 4 4 4 RM 50,705,000 ← The company's management estimates that the market requires 16 percent return on its common stock, the firm's bonds command a yield to maturity of 8.5 percent, and the firm faces a tax rate of 33 percent. At the end of the previous year Stargate Nation's common stock was selling for a price 1.6 times its book value, and its bonds were trading near their par value.<

irgate Nation atu Kawan trial Ar The company needs to raise funds for its planned expansion into the Northern Part of Malaysia. The firm's balance sheet at the close of 2021 appeared as follows: Cash Accounts Receivable Inventories Net Plant and Equipment له Total Assets RM 2,210,000+ 4,380,000+ 11,540,000+ 32,575,000+ RM 50,705,000€ Long-term Debt (Bond) Common Equity Total Debt and Equity RM 18,341,000+ Calculate the cost of capital for Stargate Nation Sdn Bhd. 4 32,364,000+ 4 4 4 RM 50,705,000 ← The company's management estimates that the market requires 16 percent return on its common stock, the firm's bonds command a yield to maturity of 8.5 percent, and the firm faces a tax rate of 33 percent. At the end of the previous year Stargate Nation's common stock was selling for a price 1.6 times its book value, and its bonds were trading near their par value.<

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

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Company “Greek Inter-Logistics MTS” can choose among different projects A, B andC. The relevant cash flows are estimated (inflows as well as initial investment) ofeach project as in the next table (figures are in euro):Year A B C0 -22,000 -38,000 -14,0001 8,000 9,000 5,0002 10,000 16,000 6,0003 9,000 15,000 5,0004 2,000 8,000 4,000 Cost of capital for “Greek Inter-Logistics MTS” is 10%.You are asked to:a. Calculate Net Present Value and Internal Rate of Return for each project.Demonstrate your calculations. (10%)b. Classify each investment according to each of the aforementioned two criteria(NPV and IRR). (5%)c. Which investments according to your opinion should the company undertake if ithad 40,000€ as available funds for investment? (5%)
Finance
Short-term debt 2,100,000 Long-term debt 2,420,000 Current assets 3,900,000 A company buys furniture for euro 100,000 incl. VAT (25%). The equipment is financed with a long-term loans in the bank. What accounting effects does the purchase of the inventory have? Use the balance equation.
Risk-free rate in your country (= interest you earn on government bond) = 7% Based on our analysis, we recommend an ERP of 7.0% for the UAE as of 30 September 2018. the risk-free rate. It represents the additional return investors require from equity investment to reflect the additional risk in the asset compared to a 'risk-free' asset. Interest you earn on a deposit in your country in your bank = 2.5% Emirates National Bank of Dubai Flexi Deposit has 2.5% of interest annually. Inflation rate in your country = 2.18% UAE’s inflation rate for 2022 is 2.18%. It was 2.02% back in 2021. Real risk-free rate The formula for real risk-free rate is (1 + Normal Risk Free Rate) / (1 + Inflation Rate)-1 (1+0.07) / (1+0.0218)- 1 = 0.047 This shows that in UAE there will be a return on an investment that is risk-free. Real interest rate on your bank deposit The formula for the real interest rate on your bank deposit is (1+Nominal Interest Rate)/ (1+…
Q25 Examine the chart below which contains Bank 1’s balance sheet. If the legal reserve requirement is 40%, then excess reserves are?: Assets Liabilities Total Reserves ? Demand Deposits $600,000 Loans $300,000 Question 25 options: a) $360,000 b) $60,000 c) $240,000 d) $120,000
Given CHF 3,500,000 as your capital, calculate the possible profit from coveredinterest arbitrage. Explain specific steps that you must take to make a coveredinterest arbitrage.Spot rate CHF 0.7359/BND270-day forward rate CHF 0.7955/BND9-month Brunei interest rate 5%9-month Swiss interest rate 4%CHF Fr.= Swiss Franc.BND = Brunei Darul Salam.
International Finance Management
Speed City supplies helicopters to corporate clients. i (Click the icon to view additional information.) Requirement a. What is Speed City's weighted average cost of capital? Begin by determining the formula to calculate WACC. X Requirements )+( + a. What is Speed City's weighted average cost of capital? b. Compute each division's Economic Value Added. X The company's results for 2020 are as follows: (Click the icon to view the data.) Read the requirements. X = WACC
swered Answer Jensen Aquatics Inc., which manufactures and sells scuba gear worldwide, is considering an investment in either Europe or Great Britain. Consider the following cash flows for each project, assume a 12% wacc, and consider these to be average risk projects for the firm. Answer the questions that follow. Britain Total cash inflows (E) Total cash outflows (6) Additional dollar cash inflows (5) Forecast exchange rate (S/E) Europe Total cash inflows (€) Total cash outflows (0) Additional dollar cash inflows (5) Forecast exchange rate (S/E) euro 4,945 $4,945 $6,420 Year 0 (Today) euro 6,420 0 15,000 0 1.50 0 20,000 0 1.00 Refer to Table 16.1. The NPV for the European investment is estimated at Year 1 8000 1000 500 1.46 12,000 1500 500 0.96 Year 2 8000 1000 500 1.45 12.000 1500 500 0.94 Year 3 8000 1000 500 1.44 12.000 1500 500 0.92
Forecasted Statements and Ratios Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them set up their new computers. Upton's balance sheet as of December 31, 2021, is shown here (millions of dollars): $ Cash Receivables Inventories Total current assets Net fixed assets million % $ 3.5 Accounts payable 26.0 Notes payable 58.0 Line of credit $35.5 6.0 15.0 66.0 Total assets $122.5 $122.5 Sales for 2021 were $350 million, and net income for the year was $10.5 million, so the firm's profit margin was 3.0%. Upton paid dividends of $4.2 million to common stockholders, so its payout ratio was 40%. Its tax rate was 25%, and it operated at full capacity. Assume that all assets/sales ratios, (spontaneous liabilities)/sales ratios, the profit margin, and the payout ratio remain constant in 2022. Do not round intermediate calculations. $87.5 Accruals 35.0 a.…

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