Limited-time offer! Save up to 50% Off | Solutions starting at $6 each  

BAFN306 - Entrepreneurial Finance

Added on - 21 Nov 2021

Trusted by +2 million users,
1000+ happy students everyday
Showing pages 1 to 4 of 13 pages
Running head: BAFN306
BAFN306
Name of the Student:
Name of the University:
Authors Note:
BAFN3061
Contents
Answer 1:.........................................................................................................................................2
Answer 2:.........................................................................................................................................4
Answer 3:.........................................................................................................................................8
Answer 5:.........................................................................................................................................8
Answer 6:.........................................................................................................................................9
NEW VENTURE FINANCING:..................................................................................................10
Answer 1:...................................................................................................................................10
Answer 2:...................................................................................................................................11
Answer 3:...................................................................................................................................11
Answer 5:...................................................................................................................................12
Answer 7:...................................................................................................................................12
References:....................................................................................................................................14
BAFN3062
Answer 1:
Part a:
As per constant growth rate the terminal value of Estimate Mindy Ltd
Expected cash inflow / (cost of capital - growth rate)
ParticularsAmount ($)
Expected cash flow26,000.00
Cost of capital20%
Constant growth rate7%
Terminal value (26000 / 20% - 7%)200,000.00
Part b:
ParticularsAmount ($)Amount
($)
Net income
637,000.00
Add: Depreciation
460,000.00
Net cash inflow from operating
activities

1,097,000.00
Less: Capital expenditures
690,000.00
Equity valuation cash flow
407,000.00
Part c:
ParticularsAmountAmount
BAFN3063
($)($)
Net income
6,372.00
Add: Depreciation
4,600.00
Net cash inflow from operating
activities

10,972.00
Add: Net debt issued
1,000.00

11,972.00
Less: Capital expenditures
6,900.00
Equity valuation cash flow
5,072.00
Answer 2:
Part A:
Sub part a:
(i)
SourcesAftertax
costs
WeightsWeighted average
cost
Long term debt6%25%1.40000%
Preference shares21%25%5.25000%
Ordinary shares26%50%13.00000%
Weighted average cost of capital19.65000%
(ii): For $2,000,000 total new
financing
If the funds are generated as per the target capital
structure
desklib-logo
You’re reading a preview
Preview Documents

To View Complete Document

Click the button to download
Subscribe to our plans

Download This Document