Please answer question 2. It is based on the case and question 1!

Question 1 is answered by Anonymous <3.

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Stark Industries ltd. manufactures advanced weapons and military technologies. The company also produces the armour worn by Iron Man and War Machine. It builds the heli-carriers used by S.H.I.E.L.D, and the Quinjets used by the Avengers. Question No. 1 (10) The company already owns many lands and properties. The Chairman of Stark Industries, Tony Stark, wants to use one of the existing lands for new project plan (Project Endgame). According to the demand, after tax market price of the land (to be used) is BDT 1,500,000. After the termination of planned project, it can be sold for BDT 1,900,000 after tax. A team led by Dr. Mark Ruffalo has done the research, costing BDT 112,000, about the feasibility of project. According to the findings of Dr. Mark Ruffalo, the End-Game project should run for 4 years. Projected sales volume will be 3500, 4000, 4600, 4920 units in years 1-4 accordingly. Price per unit will be BDT 700. Fixed cost of the project will be BDT 433,000 per year. Variable cost will be 13% of revenue. Machineries will cost BDT 4,000,000 and will be depreciated at 33.33%, 44.45%, 14.81%, and 7.41% for years 1-4 respectively. At the end of the project, machineries can be scrapped for BDT 500,000. For business operation, net working capital requirement of BDT 150,000 will be required in first year only. Currently government corporate tax rate is 35%.

Determine the projected cash flows for Project Endgame. Question No.2 (10)

Stark Industries limited follow the below mentioned capital structure mix: Capital Structure Amount (BDT) Ordinary shares 7000 Preference share 3000 bond 5000

I. Stark Industries Limited issued 6 years bond that can be sold for a net price of BDT 1133. The coupon rate is 14% and bond will be redeemed at 9% discount on maturity. Tax rate is 35%. II. Stark also issued 10% irredeemable preference shares. Face value per share is BDT100 but the issue price is BDT 96. III. The share of the company sells for BDT 75. It is expected that company will pay next year a dividend of BDT 18 per share, which will grow at 3% forever.

Calculate the Weighted average cost of capital for Stark Industries limited.