question closed because it is really multiple questions. Please ask separate questions such as "how do I calculate the weighted average cost of capital?"
XYZ telecom is considering a project for the coming year that will cost $ 80 million. XYZ Plans to use the following combination of debts and equity to finance the investment. • Issue $ 35 million of 20-years bonds at a price of 101, with a coupon rate of 8 percent, and flotation costs of 2 percent of par. • Use $ 45 million of funds generated from earning ( that considered as an equity ) Assume that the after-tax cost of debt is 7 percent and the cost of equity is 12 percent
• Identify the sources of finance available to a XYZ? • Assess the implications of the different sources of finance for XYZ? • Select appropriate sources of finance for a XYZ company? • Assess and compare the costs of different sources of finance for XYZ? • Describe the impact of the type of finance on the financial statements of XYZ? • Explain the concept of weighted Average cost of capital? And calculate it?
Asked: Mar 08 '11
Seen: 554 times
Last updated: Mar 11 '11
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