Question: Accounting question need both answer in detail. Assignment Exercise 1: Dhofar Company has invented a new product that will revolutionize the market. The company is

Accounting question need both answer in detail.

Accounting question need both answer in detail. Assignment Exercise 1: Dhofar Company

Assignment Exercise 1: Dhofar Company has invented a new product that will revolutionize the market. The company is certain there will be demand from millions of people around the world, and therefore it needs to build a new factory. The company is planning to raise OMR 200000 for constructing the factory. The Company's existing capital structure consists of 500 common stock. The company has following alternative plans of financing. I. To issue/sell 2000 common stock @ OMR 100 each II. To issue 2000 8% Preferred Stock @ OMR 100 each To issue 10000, 9% Bonds @ OMR 20 each The company's EBIT is 75000. The corporate Tax rate is 20% a) Kindly suggest which alternative plan of financing is better and why? b) Assume you are the finance manager of this company and during the current situation of pandemic Covid-19, which financing alternative will you choose and why? c) Assume you are a stockholder in this company with 100 common stocks, how much dividend (part of profit) you will get if company choose Plan 1, Plan 2 or Plan 3 Assignment Exercise 2: Dhofar Company is planning to raise 1000000 for constructing a new factory in order to increase its production. The Company's existing capital structure consists of 500 common stocks. The company has following alternative scheme of financing. 1. To issue 5000 common stock @ 100 each AND issue 5000, 8% Bonds @ 100 each II. To issue 5000 10% Preferred Stock @ 100 each AND issue 5000, 9% Bonds @ 100 each The company's EBIT is 300000. The corporate Tax rate is 25% a) Kindly suggest which alternative plan of financing is better and why? b) Assume you are the finance manager of this company and during the current situation of pandemic Covid-19, which financing alternative will you choose and why? c) Assume you are a stockholder in this company with 200 common stocks, how much dividend (part of profit) you will get if company choose Plan 1 or Plan 2

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