Case 2: (10%)

OneWeb - the global communications network, has announced that a high throughput satellite connectivity platform will provide broadband Internet to remote and hard-to-reach rural communities in Kazakhstan by building a ground station to connect to OneWeb's Low Earth Orbit satellites. New equipment will be directly delivered from the UK. The CFO of OneWeb was asked to calculate NPV of the project requiring $200 mln of initial investments with use of own equity and attracted debt financing in 2021. The project will generate $30 mln each year after the commissioning date in 2022 till the end of expiration of state license provided only for 20 years. According to the U.S. Treasury Department 10 years and 20 years Treasury bills' rates are at 1.69% and 2.29% respectively. Market return is 6%. Relevered Damodaran's beta for Telecom & Communications industry is A.3A. Duff & Phelps Size Premium - 1.80%. The Country Risk premium, according to Damodaran - 3.71%. Taking into account the potential devaluation risk, the Currency risk premium is determined as 2% for Kazakhstan, Market D/E ratio for Software companies is 0.08, while for Telecom & Communications companies is 0. 44. Loans rate to non-banking legal entities is 5.4% (National Bank of the Republic of Kazakhstan). Corporate income tax - 20% (Tax Code of the Republic of Kazakhstan). Please determine the following by detailed explanation:

Question 21 What is the D/E of the Company?

A)1.34

B)0.08

C)0,44

D)0.20

Question 22 What is the Cost of equity?

A)14.8%

B)2.3%

C)7.3%

D)10.5%

Question 23 What is the after-tax Cost of debt?

A)1.7%

B)9.7%

C)4.3%

D)5.4%

Question 24 What is the Weighted Average Cost of Capital (WACC)?

A)12.4%

B)7.3%

C)19.5%

D)10.2%

Question 25 What is the NPV of the project?

A)-13 mln

B)52 mln

C)42 mln

D)20 mln

Case 2: (10%) 5 questions OneWeb - the global communications network, has announced that a tigh throughput satellite connectivity platform will provide broadband Internet to remote and hard-to-reach rural communities in Kazakhstan by building a ground station to connect to OneWeb's Low Earth Orbit satellites. New equipment will be directly delivered from the UK. The CFO of OneWeb was asked to calculate NPV of the project requiring $200 min of initial investments with use of own equity and attracted debt financing in 2022. The project will generate $30 min each year after the commissioning date in 2022 till the end of expiration of state license provided only for 20 years. According to the U.S. Treasury Department 10 years and 20 years Treasury bills rates are at 1.69% and 2 29% respectively Market return is 6%. Relevered Damodaran's beta for Telecom & Communications industry is 1.3A, Dutt & Phelps Size Premium - 1.80%. The Country Risk premium, according to Damodaran - 3.71%. Taking into account the potential evaluation risk, the Currency risk premium is determined as 2% for Kazakhstan, Market D/E ratio for Software companies is 0.08, while for Telecom & Communications companies is 0.44. Loans rate to non-banking legal entities is 5% (National Bank of the Republic of Kazakhstan). Corporate income tax -20% (Tax Code of the Republic of Kazakhstan). Please determine the following by detailed explanation: Question 23 What is the after-tax Cost of debt? 0 1.7% 9.7% 4.3% 0 5.4% Question 24 What is the Weighted Average Cost of Capital (WACC)? O 12.4% 07.3% 19.5% O 10.2%