In this question, for a) part
Can you tell me in the financing side-effects section of the answer, how did they get 4% for the 40% debt funding for the project?
For the 60%, it is understandable how they got 1.5% because the government is providing subsidised loan by providing a reduction of 100 basis points to the normal rate of 2.5%.
But how 4% for the other 40% debt from normal borrowing sources?
Also can you explain that Annual subsidy benefit part as well.
Thank you
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Q.29 Burung Co (6/14) BPP Kit
9y ago#1Note (v) of the question says that the normal borrowing rate is 150 basis points above the 10 year government yield rate.
2.5% + 1.5% = 4%.
The subsidy benefit is the difference between the normal rate (4%) and the subsidised rate (1.5%)
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