Homework Help is Here – Start Your Trial Now!
Business
Finance
1.) An amount of R1 500 is deposited in a bank paying an annual interest rate of 4.3%, compounded quarterly. Find the balance after 6 years. 2.) Your goal is to accumulate R30 000 after 17 years from now. How much must you invest now

1.) An amount of R1 500 is deposited in a bank paying an annual interest rate of 4.3%, compounded quarterly. Find the balance after 6 years. 2.) Your goal is to accumulate R30 000 after 17 years from now. How much must you invest now

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...
See similar textbooks
icon
Related questions
Question
1.) An amount of R1 500 is deposited in a bank paying an annual interest rate of 4.3%, compounded quarterly. Find the balance after 6 years. 2.) Your goal is to accumulate R30 000 after 17 years from now. How much must you invest now to have, at an interest rate of 8% compounded semi-annually? 3.) If R500 accumulated to R700 in 5 years with a certain interest compounded quarterly, what is the rate of interest? 4.) A debt of R5000 is to be amortised by 5 quarterly payments made at 3 month intervals. If interest is charged at the rate of 12% convertible quarterly, find the period payment and construct an amortisation schedule. Round the payment up to the nearest cent. 5.) Raees Braai Ltd has the following capital structure: Equity, 2000000, R2, ordinary shares, market price R2, 50 Preference, 1000000, 12%, R1 preference shares, market price R1,20 Reserves R1500 000 Bank loan R500 000, 15% bank loan Debentures R 1750000,16% debentures, market price R110 (issued at R100). The current and expected future rate of ordinary share dividend is 20%. What is the firm's weighted average cost of capital? 6.) SK Handelaars is a logistics company based in Polokwane, South Africa. They are deciding whether to pay out R120 000 in excess cash in the form of an extra dividend or implement a share buyback/repurchase. Their profits for the current year are R1.95 per share and the share sells for R 18. Their summarised balance sheet prior to the dividend payment is as follows (all figures in ZAR). a) Calculating the number of shares in issue. b) The dividends per share (for the first alternative and pay the dividend). c) Calculate: the new share price, the Earnings per share and the price - earnings ratio. d) What alternative do you consider to be the best? Why?
Transcribed Image Text:1.) An amount of R1 500 is deposited in a bank paying an annual interest rate of 4.3%, compounded quarterly. Find the balance after 6 years. 2.) Your goal is to accumulate R30 000 after 17 years from now. How much must you invest now to have, at an interest rate of 8% compounded semi-annually? 3.) If R500 accumulated to R700 in 5 years with a certain interest compounded quarterly, what is the rate of interest? 4.) A debt of R5000 is to be amortised by 5 quarterly payments made at 3 month intervals. If interest is charged at the rate of 12% convertible quarterly, find the period payment and construct an amortisation schedule. Round the payment up to the nearest cent. 5.) Raees Braai Ltd has the following capital structure: Equity, 2000000, R2, ordinary shares, market price R2, 50 Preference, 1000000, 12%, R1 preference shares, market price R1,20 Reserves R1500 000 Bank loan R500 000, 15% bank loan Debentures R 1750000,16% debentures, market price R110 (issued at R100). The current and expected future rate of ordinary share dividend is 20%. What is the firm's weighted average cost of capital? 6.) SK Handelaars is a logistics company based in Polokwane, South Africa. They are deciding whether to pay out R120 000 in excess cash in the form of an extra dividend or implement a share buyback/repurchase. Their profits for the current year are R1.95 per share and the share sells for R 18. Their summarised balance sheet prior to the dividend payment is as follows (all figures in ZAR). a) Calculating the number of shares in issue. b) The dividends per share (for the first alternative and pay the dividend). c) Calculate: the new share price, the Earnings per share and the price - earnings ratio. d) What alternative do you consider to be the best? Why?
Expert Solution
steps

Step by step

Solved in 3 steps with 1 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Money Management and Achieving Financial Goals
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Corporate Fin Focused Approach
Corporate Fin Focused Approach
Finance
ISBN:
9781285660516
Author:
EHRHARDT
Publisher:
Cengage
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
SEE MORE TEXTBOOKS