Please solve subpart A,B max 30-45 minutes thank u AmN companies will get capital from several options where the total funds must be obtained of 1.1 billion rupiah. The following is currently available market information: 1. Debt interest rate is 12% per year 2. State Bonds with minimal risk (risk free) of 5% 3. JCI has a market return of 8% 4. The company tax applied is 25% 5. The company's performance is good so it has a stock Beta of 1.12 The available options relate to the source of AmN's company capital, namely from Debt (direct to bank) and Equity (through ordinary shares) with the following explanation: 1. Fully capital obtained from debt 2. Fully capital obtained from equity 3. The DER policy applied is 1/3 (or DER = 0.3333) Based on the narrative above you are asked to: A. Calculate WACC from the three available options B. Decide on the best choice with the reasons.
Please solve subpart A,B max 30-45 minutes thank u
AmN companies will get capital from several options where the total funds must be obtained of 1.1 billion rupiah. The following is currently available market information:
1. Debt interest rate is 12% per year
2. State Bonds with minimal risk (risk free) of 5%
3. JCI has a market return of 8%
4. The company tax applied is 25%
5. The company's performance is good so it has a stock Beta of 1.12
The available options relate to the source of AmN's company capital, namely from Debt (direct to
bank) and Equity (through ordinary shares) with the following explanation:
1. Fully capital obtained from debt
2. Fully capital obtained from equity
3. The DER policy applied is 1/3 (or DER = 0.3333)
Based on the narrative above you are asked to:
A. Calculate WACC from the three available options
B. Decide on the best choice with the reasons.
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