Order ID:89JHGSJE83839 | Style:APA/MLA/Harvard/Chicago | Pages:5-10 |
Instructions:
Debt Rs.30 million
Equity Rs.60 million
The company plans to maintain this market-value capital structure. It has a plan to invest Rs.15 million next year. This will be financed as follows:
Retained earnings Rs.5 million
Additional equity Rs.5 million
Debt Rs.5 million
The company’s equity stock presently sells for Rs.30 per share. The next dividend expected is Rs.3.00. The expected rate of dividend growth is 5 per cent. Additional equity can be issued at Rs.25 per share (net). The interest rate applicable to additional debt would be as follows:
First Rs.2.5 million 14 per cent
Next Rs.2.5 million 15 per cent
The tax rate for the firm is 60 per cent.
Required:
(a) At what amounts of new capital will there be breaks in the marginal cost of capital schedule?
(b) What will be the marginal cost of capital in the interval between each of the breaks?
RUBRIC |
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Excellent Quality 95-100%
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Introduction
45-41 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Literature Support 91-84 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned. |
Methodology 58-53 points Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met. |
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Average Score 50-85% |
40-38 points More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided. |
83-76 points Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration. |
52-49 points Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met. |
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Poor Quality 0-45% |
37-1 points The background and/or significance are missing. No search history information is provided. |
75-1 points Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration. |
48-1 points There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met |
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