MAC2602 ASSIGNMENT 2 SEMESTER 1 & 2 2021

MAC2602 ASSIGNMENT 2 SEMESTER 1 & 2 2021 UNIQUE NUMBER: QUESTION 1 Show the components of total equity financed amounts as well as the components of debt financed amounts separately, then calculate the capital structure of CoreOre Limited. S - The study-notes marketplace Downloaded by: madyahf | Distribution of this document is illegal S - The study-notes marketplace QUESTION 1 Show the components of total equity financed amounts as well as the components of debt financed amounts separately, then calculate the capital structure of CoreOre Limited. Total amount financed: + = Capital structure: Equity (342 555 / 611 855 This is the TOTAL of ALL CAPITAL (therefore the DEBT PLUS the EQUITY x 100 / 1) 55,99% Rounded to 56% Debt (269 300 / 611 855 x 100 / 1) 44,01% Rounded to 44% D:E Ratio = 44:56 CoreOre needs to raise R30 million for a project. Advise them on how they should finance the new project keeping the target capital structure in mind. The target capital structure was given in the question as being 40:60 (40% debt and 60% equity of the total capital of 100%. Capital structure: Equity (372 555 / 641 855 x 100 / 1) 58,04% Rounded to 58% Debt (269 300 / 641 855 x 100 / 1) 41,96% Rounded to 42% The new debt:equity ratio will then be 42:58 S - The study-notes marketplace Downloaded by: madyahf | Distribution of this document is illegal S - The study-notes marketplace With the additional R30m added to equity, the capital structure changed as follows: Debt decreased from 44% to 42% (therefore closer to the target of 40%. Equity increased from 56% to 58%. Calculate the cost of ordina