FIN3701 ASSIGNMENT 2 SEMESTER 1 – 2024 (505104) DUE DATE: 24 APRIL 2024 QUESTION 1. REQUIRED: 1.1 Calculate the current price of Titan Mining Corporation’s ordinary share. 1.2 Should Bonga purchase Titan Mining Corporation shares to include in his investment portfolio? Provide reasons for your answer. QUESTION 2. REQUIRED: 1.1 Calculate the component costs associated with capital investment financing. 2.2 Calculate the weighted average cost of capital (WACC), the break-point of equity and the break-point of debt under the current structure. 2.3 Calculate the WACC, the break-point of equity and the break-point of debt under the proposed structure. 2.4 Calculate the number of shares under the current structure. 2.5 Calculate the number of shares under the proposed structure. QUESTION 3. REQUIRED: 3.1 Which capital structure would you advise the company to choose if its objective is to maximise earnings per share (EPS)? 3.2 Calculate the weighted average cost of capital (WACC) for both the current and proposed debt structures. 3.3 Which capital structure would you advise the company to choose if the aim is to maximise shareholder wealth?
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