FINA 3371: CAPITAL STRUCTURE AND BUDGETING - Group Project -

This is a group assignment. A group can consist of two or three students. However if a student wishes to do the assignment alone, he/she can do so. Maximum number 3 students in one group. Once a group decides on a company please inform the instructor (so that no other group takes up the same company).

Required:

Collect the following information related to any company listed in MSM or any GCC stock market:1%

1- Sales

2- Cost of Sales

3- Operating Expenses

4- Earnings Before Interest and Taxes

5- Debt

6- Equity

7- Average Interest Rate on Existing Debt2*

8- Interest Rate on new debt

9- Number of Shares outstanding

10- Average tax rate

Calculate the earnings per share (EPS), cost of capital (WACC), value of the firm (VL ) and Ratio of Debt to Equity

Assuming no change in Ratio of Debt to Equity

Increase Sales by 50% and recalculate EPS, WACC and VL

Decrease Sales by 50% and recalculate EPS, WACC and VL