Need help with a and b as well as the last question on whether the internal rate of return is the same as discount rate ABC Ltd is listed on the ASX and has 15,000 shares outstanding that are currently trading at $35 each.It is an all equity firm. ABC has four independent business ventures under consideration, all with arisk level requiring a return of 12% pa.IRRNPVVenture W8.9%-$4,356Venture X15.3%$9,730Venture Y23.5%$2,560Venture Z13.3%$8,550(a) Which is the best business venture and why?(b) What is the effect on share price if all valuable ventures are accepted?"The internal rate of return is the same thing as the discount rate." Is this statement true or false?Explain.

Part 2: Explanation:Step 1: Assessing the Best Business VentureTo determine the best business…

Answered: ABC Ltd is listed on the ASX and has…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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SISA Ltd is a company with 40 000 authorised Ordinary Share Capital with a par value of R1. The company issued 30 000 shares at R1.30 for each share. What would be the effect of this transaction in SISA’s records? Select one: a. Ordinary share capital will increase by R39 000 and share premium will be unaffected. b. Ordinary share capital will increase by R39 000 and share premium will increase by R9 000. c. Ordinary share capital will increase by R30 000 and share premium will increase by R39 000. d. Ordinary share capital will increase by R30 000 and share premium will increase by R9 000.
The Mike Corporation’s statement of financial position shows total shareholders’ equity of P3,150,000 as of December 31, 2016. a. What is the book value per share, assuming that the company has only one class of share capital outstanding consisting of 50,000, P10 par ordinary shares?A. P10.00B. P63.00C. P70.20D. P73.00 b. What is the book value per ordinary share assuming that the company has two classes of share capital outstanding consisting of the following: 5,000, P100 par value preference shares with a liquidation value of P120 per share and 50,000, P10 par value ordinary shares?A. P10.00B. P51.00C. P53.00D. P63.00
ed A company has the following balance sheet (market values): Liabilities + Equity Debt Equity Assets Cash Operating Assets 600 1000 400 1200 If the firm has 300, find its fair share price after it repurchases 100 worth of shares: (round your answer to the nearest 0.01)
An entity has the following information in its statement of financial position. Ordinary shares of 50c $2 500 000 12% unsecured bonds $1 000 000 The ordinary shares are currently quoted at 130c each and the bonds are trading at $72 per $100 nominal.The ordinary dividend of 15c has just been paid with an expected growth rate of 10%. Corporation tax is currently 30%. Calculate the weighted average cost of capital for this entity
Globex Corporation plc shares are currently trading at $5.00 each. Management wishes to raise capital to expand the business and announces a rights issue. Existing shareholders will be given the right to purchase one share at $3.00 for each three shares currently held. Which of the following statements is correct?a. The ex rights share price is £2.00 and the value of one right is £3.00b. The ex rights share price is £4.17 and the value of one right is £2.00c. The ex rights share price is £4.50 and the value of one right is £0.50d. The ex rights share price is £5.00 and the value of one right is £2.00e. None of the above
A company has the following book value in capital structure:GHSMEquity capital (in shares of GHS 10 each, fully paid-up at par)1511% Preference capital (in shares of GHS 100 each, fully paid-up at par)1Retained earnings 2013.5% Debentures (of GHS 100 each)1015% Term Loans12.5The next year expected dividend on equity shares is GHS 3.60 per share and the dividend per share is expected to grow at 7% into the foreseeable future. The market price per share is GHS 40. Preference stock, redeemable after 10 years is currently selling at GHS 75 per share. Debentures, redeemable after six years, are selling at GHS 80 per debenture. The income-tax rate for the company is 40%Required Calculate the weighted average cost of capital of raising new capital.
(b) The owners' equity account for Rantuil Utilities Berhad are shown below: Common Share (RM2 par) Capital Surplus Retained earnings Total shareholder's equity RM30,000 RM285,000 RM648,100 RM963,100 If Rantuil Utilities Berhad currently sells for RM30 per share and a 10 percent share dividend is declared, i. Determine the number of new shares that will be distributed. ii. Reconstruct new owners' equity account for Rantuil Utilities Berhad.
Firm A has Net Income of $17M and has 123,000 shares outstanding. Estimate its share price based on the following information about its peers: Firms B CDE 119 P/E 5.2 -5.0 7.0 8.8
Rock Corp. has a EBITDA of $1,000 and is in an industry where EV/EBITDA multiples are generally 8.0x. Rock has Net Debt of $4,000 and 2,000 shares outstanding, what is an approximate value of Rock Corp's stock price per share? a) $1 b) $2 c) $3 d) $4
The shareholder's equity of Cecille Corp. revealed the following on June 30, 2014: Preference share, P100 par value P230,000 Preference share premium 80,500 Ordinary share, P15 par value 525,000 Ordinary share premium 275,000 Ordinary share subscribed 5,000 Retained earnings 190,000 Notes payable 400,000 Subscription receivable ordinary 40,000 - 1. How much is the legal capital? 2. How much is the additional paid-in capital? 3. How much is the total shareholder's equity? 00
Case study 3: Victory SAOG is registered with an authorized capital of OMR 50 million ordinary shares of 100 baiza each. The company had issued and paid up capital of OMR 33 million. In the year 2017 Victory SAOG has an outlined share repurchase program which would enable the company to repurchase at least 10 per cent of its outstanding shares. The company had an opening balance of OMR 55 million in its retained earnings account. After completing the required formalities for such repurchase in the vear 2017, the company was able to repurchase the 19.8 million shares valued at OMR 31,680,000 in the month of August. Later in the year 2019 the company was able to repurchase another 10 million shares for OMR 15 million in July. The following are the profits earned by the company over the period of 2017 to 2019: OMR in Millions' 2017: 110 2018: 150 2019: 160 The company decided to distribute dividends as mentioned below: #Interim dividend: 2017: Nil 2018:5% 2019:Nil #Final dividend:…
BFAR Corporation has the following information in its shareholders' equity: Ordinary Share Capital of P1,600,000 - P200 par value Share Premium, P400,000 Accumulated Profits of P900,000. ● A share dividend of 6% was declared when the share is selling at P500 per share. Compute the balance of Accumulated Profits after dividend declaration.

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