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Commonwealth Property Development Project Case Study

Autor: Kristine101  •  February 26, 2018  •  Case Study  •  403 Words (2 Pages)  •  398 Views

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Case Title:

Commonwealth Property Development Project

Case Presented to:

USLS Graduate School of Management in partial fulfilment of the requirement in

MBA 207-A

By:

Group III

Salazar, Mary Kristine A.

Moralidad, Ardez Riz

Espiritu, Edelbert

Dioneo, Dennisa

Arriola, Manuel Antonio

Date:

October 7, 2017

Group III Answers

Commonwealth Property Development Project Case Study

Group Case No. 5

Requirement No. 1

Compute the present values of preferred dividends to be received by UP under a 75-year, 50-year and 25-year lease terms.

Answer:

Preferred dividends to be received:

5 million x 12%

=

₱ 600 million

at 75-year lease:

600 million [1 - (1.10)-75 / 0.10] - 600 million (1.10)-1

PV of preferred dividends =

5,449,828,085.00

at 50-year lease:

600 million [1 - (1.10)-50 / 0.10] - 600 million (1.10)-1

PV of preferred dividends =

5,403,434,147.00

at 25-year lease:

600 million [1 - (1.10)-25 / 0.10] - 600 million (1.10)-1

PV of preferred dividends =

4,900,769,465.00

Requirement No. 2

Assuming that a straight-lease scheme is adopted of preferred stocks, compute the present value of the lease payment.

Answer:

98.5 hectares x 10,000 sq. m. = 985,000 sq. m.

Equity interest in common stocks:

5 billion

Fixed payment:

985,000 sq. m. x P41.50/sq. m. =

...

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