PART 1 - WEIGHTED AVERAGE COST OF CAPITAL Enter numbers in the "Cost" column as percentages rounded to 3 decimal places

PART 1 - WEIGHTED AVERAGE COST OF CAPITAL Enter numbers in the "Cost" column as percentages rounded to 3 decimal places. Enter whole numbers only in the "Value" column and base your weights on those whole numbers. Enter numbers in the "Weight" column as percentages rounded to 2 decimal places. COST (3 decimal places) VALUE (Whole numbers) WEIGHT (2 decimal places) SOURCE OF CAPITAL Bank Loan (interest only) Before-tax cost of bank loan Market value of bank loan Mortgage Loans Before-tax cost of mortgage loan Market value of mortgage loan Corporate Bonds Credit snread Student NO 256 Credit Spreads Balance Sheet Online Data ihasis noints Project Info Part 1 Part 2
FIN1FOF- FUNDAMENTALS OF FINANCE - ASSIGNMENT Sydney Manufacturing Company Ltd Balance Sheet as at 31/12/19 ASSETS LIABILITIES Notes 110 210 620 110 250 Cash Accounts Receivable Inventory Property, plant & equipment 1 Accounts payable Bank loan (interest only) Mortgage Loan Corporate bonds w N 520 350 1,120 Total Assets 2,060 Total liabilities 1,230 SHAREHOLDERS' EQUITY Ordinary shares 4 Preference Shares 5 Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 400 200 230 830 2,060 Notes 1. The interest rate on the bank loan is 8.7% p.a. 2. The interest rate on the mortgage loan is 5.8% p.a. 3. The corporate bonds have a credit rating of AA- and have 4 years to maturity. They make quarterly coupon payments at a coupon rate of 8% p.a. 4. The ordinary shares are shown on the balance sheet at their book value of $1 per share. They have a beta of 1.9. They are expected to pay a dividend of $0.06 next year. The dividend is expected to grow at a rate of 8% p.a. for the following 4 years, and after that it will grow at a constant rate of 3% p.a. in perpetuity. 5. The preference shares have a par value of $1 each and are shown on the Balance Sheet at their par value. They pay a constant dividend of $0.11 and they are currently trading for $1.01. 6. The expected return on the market is 7.3%.