Economic growth Probability With Expansion Without Expansion
High 0.20 S$ 65 million S$55 million
Normal 0.55 S$ 8 million S$ 8 million
Low 0.25 S$ 34 million S$ 30 million
1. What is the expected value of the Company with and without expansion? a b a x b
Probability Without Expansion
0.20 S$55 million S$ 11 million
0.55 S$ 8 million S$ 4.4 million
0.25 S$ 30 million S$ 7.5 million S$ 22.9 million
a b a x b
Probability With Expansion
0.20 S$ 65 million S$ 13 million
0.55 S$ 8 million S$ 4.4 million
0.25 S$ 34 million S$ 8.5 million S$ 25.9 million
2. What is the expected value of the Company’s debt with and without the expansion? a b a x b
Probability With / Without Expansion
0.20 S$ 36 million S$*…show more content…*

What is the impact to stockholders if the expansion is financed with cash on hand instead of new equity? Since the expansion will be financed by cash on hand, the company uses the internal sources such as retained earnings. However, the negative side of it is that immediate money will not be available for the stockholders but in the long run they can get capital gains because the value of shares will go up. has to allocate more income for retained earnings. The more you retained, the lesser dividend available for the stockholders Economic growth Probability With Expansion Without Expansion High 0.20 S$ 65 million S$55 million Normal 0.55 S$ 8 million S$ 8 million Low 0.25 S$ 34 million S$ 30 million 1. What is the expected value of the Company with and without expansion? a b a x b Probability Without Expansion 0.20 S$55 million S$ 11 million 0.55 S$ 8 million S$ 4.4 million 0.25 S$ 30 million S$ 7.5 million S$ 22.9 million a b a x b Probability With Expansion 0.20 S$ 65 million S$ 13 million 0.55 S$ 8 million S$ 4.4 million 0.25 S$ 34 million S$ 8.5 million S$ 25.9 million 2. What is the expected value of the Company’s debt with and without the expansion? a b a x b Probability With / Without Expansion 0.20 S$ 36 million S$ 7.2 million 0.55 S$ 36 million S$ 9 million 0.25 S$ 36 million S$ 19.8 million S$ 36 million The expected

What is the impact to stockholders if the expansion is financed with cash on hand instead of new equity? Since the expansion will be financed by cash on hand, the company uses the internal sources such as retained earnings. However, the negative side of it is that immediate money will not be available for the stockholders but in the long run they can get capital gains because the value of shares will go up. has to allocate more income for retained earnings. The more you retained, the lesser dividend available for the stockholders Economic growth Probability With Expansion Without Expansion High 0.20 S$ 65 million S$55 million Normal 0.55 S$ 8 million S$ 8 million Low 0.25 S$ 34 million S$ 30 million 1. What is the expected value of the Company with and without expansion? a b a x b Probability Without Expansion 0.20 S$55 million S$ 11 million 0.55 S$ 8 million S$ 4.4 million 0.25 S$ 30 million S$ 7.5 million S$ 22.9 million a b a x b Probability With Expansion 0.20 S$ 65 million S$ 13 million 0.55 S$ 8 million S$ 4.4 million 0.25 S$ 34 million S$ 8.5 million S$ 25.9 million 2. What is the expected value of the Company’s debt with and without the expansion? a b a x b Probability With / Without Expansion 0.20 S$ 36 million S$ 7.2 million 0.55 S$ 36 million S$ 9 million 0.25 S$ 36 million S$ 19.8 million S$ 36 million The expected

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