Corporate Finance

Corporate Finance

TABLE OF CONTENTS
A Ascertaining the weighted average cost of capital..................................................................3
B Analysing the condition of the proposed project in a favourable state...................................4
C Determining the project must go ahead as per the case scenario............................................5
D Determining the role of finance analyst..................................................................................6
REFERENCES................................................................................................................................8

A Ascertaining the weighted average cost of capital
Cost of equity share capital:
Particulars amount
Share price (ordinary shares) 42
O/S shares 30000000
Market capital (E) 1260000000
Beta rate 2.639
Risk free rate 0.035
Expected market return 0.1252
Market risk premium 0.0902
cost of equity 27.30%
Cost of debt capital:
Particulars amount
Face value 100
O/S Bonds 5000000
Coupon rate 0.1
market price 92.34
Coupon 10
market value 461700000
Years of maturity 20
Corporate tax 0.34