Exam (elaborations)
MAC2602 Assignment 3 semester 2 2023
- Institution
- University Of South Africa (Unisa)
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MAC2602 ASSIGNMENT 3SEMESTER 2 2023
WRITTEN BY EXPERT
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QUESTION 01
1.1 b
1.2 d
1.3 b
1.4 A
1.5 C
1.6 C
, MAC3761/QB002
5.9. SOLUTION 09: KINGSTON LIMITED
a) Calculate cost of debt (loan)
Loan = (10,5% + 2%) x 0,72 = 9%
b) Calculate cost of debt (debentures)
Debentures = 10% x 0,72 = 7,2%
c) Calculate cost of equity
= +g
= + 0,12
= 16,48%
Using Capital Asset Pricing Model
= Rf + ß (Rm Rf)
= Rf + ß (Rp)
= 7% + 1,2 * (7,9%)
= 16,48%
d) Calculate market value of loan (Vd1)
Key Variables Value
FV R10 000 000 -10 000 000
N 3 years 3
i (10,5% + 2%) x 0,72 9
PMT R10 000 000 x (10,5% - 1%) x 0,72 -684 000
Comp PV Calculation 9 453 240
183
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