How to calculate the before tax bank loan and the market value of bank loan? Captured with

How to calculate the before tax bank loan and the market value of bank loan?

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Captured with Xnip ASSETS Balance Sheet as at 31/12/19 LIABILITIES Accounts payable Bank loan (interest only) Cash 130 Accounts Receivable 220 Inventory 650 Mortgage Loan Property, plant & equipment 1,040 Corporate bonds Total Assets 2,040 Total liabilities Notes 1. The interest rate on the bank loan is 9% p.a. 2. The interest rate on the mortgage loan is 5.9% p.a. Notes 110 123 210 2 510 310 1,140 SHAREHOLDERS' EQUITY Ordinary shares 4 450 Preference Shares 5 210 Retained earnings 240 Total shareholders' equity 900 Total liabilities and shareholders' equity 2,040 3. 4. 5. The corporate bonds have a credit rating of AA and have 8 years to maturity. They make quarterly coupon payments at a coupon rate of 5% p.a. The ordinary shares are shown on the balance sheet at their book value of $1 per share. They have a beta of 1.8. They are expected to pay a dividend of $0.07 next year. The dividend is expected to grow at a rate of 10% p.a. for the following 4 years, and after that it will grow at a constant rate of 4% p.a. in perpetuity. 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 $0.05 and they are currently trading for $1.06. 6. The expected return on the market is 8.7%. Captured with Xnip ASSETS Balance Sheet as at 31/12/19 LIABILITIES Accounts payable Bank loan (interest only) Cash 130 Accounts Receivable 220 Inventory 650 Mortgage Loan Property, plant & equipment 1,040 Corporate bonds Total Assets 2,040 Total liabilities Notes 1. The interest rate on the bank loan is 9% p.a. 2. The interest rate on the mortgage loan is 5.9% p.a. Notes 110 123 210 2 510 310 1,140 SHAREHOLDERS' EQUITY Ordinary shares 4 450 Preference Shares 5 210 Retained earnings 240 Total shareholders' equity 900 Total liabilities and shareholders' equity 2,040 3. 4. 5. The corporate bonds have a credit rating of AA and have 8 years to maturity. They make quarterly coupon payments at a coupon rate of 5% p.a. The ordinary shares are shown on the balance sheet at their book value of $1 per share. They have a beta of 1.8. They are expected to pay a dividend of $0.07 next year. The dividend is expected to grow at a rate of 10% p.a. for the following 4 years, and after that it will grow at a constant rate of 4% p.a. in perpetuity. 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 $0.05 and they are currently trading for $1.06. 6. The expected return on the market is 8.7%.