P Ltd. issues 40,000, 7½% Preference shares if $100 each redeemable after 6 years at a premium of 5% and its cost of issue is $2.50 per share Assuming 10% dividend tax, calculate the cost of preference capital. Select one
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P Ltd. issues 40,000, 7½%
Select one:
a) 8.03%
b) 7.29%
c) 9.38%
d) 9.71%
Step by step
Solved in 3 steps
- XYZ issued a series of preference share that currently pay dividend of $4.55 per share in perpetuity. What is the current market price of XYZ shares if required rate of return is 11% p.a.An entity provided the following shareholders' equity at year-end:10% cumulative preference share capital, P100 par, 30,000 shares 3,000,000Ordinary share capital, P100 par value, 50,000 shares 5,000,000Retained earnings 4,000,000Dividends in arrears on the preference shares are for 5 years. If the entity were to be liquidated, the preference share would receive par plus a premium of P300,000. What is the book value per ordinary share?A company issued 10000, 10% preference share of Rs.10 each, cost of issue is Rs. 2per share. Calculate cost of capital if these shares are issued (a) at 10% premium and (b) at 5% discount.
- c) The Earnings Per Share of a company is Rs. 8 and the rate of Capitalization applicable is 10%. The company has before it, an option of adopting: (i) 50, (ii) 75 and (iii) 100 percent dividend payout ratio. Compute the market price of the company's quoted shares as per Walter's model if it can earn a return of (A) 15, (B) 10 and (C) 5 percent on its Retained Earnings.ZZZ Company had the following share capital at the end of the current year: Preference share capital, P100 par, 30,000 shares 3,000,000 Ordinary share capital, P50 par, 100,000 shares 5,000,000 Net income for the year 2,600,000 The preference dividend rate is 8% and the preference share is nonconvertible but cumulative and fully participating. After the ordinary share has been paid a dividend of P10 per share, the preference share shall participate in any additional dividend on a prorate basis with the ordinary share. Questions: 1. Compute for the basic earnings per ordinary share. 2. Compute for the basic earnings per preference share.Use the commission schedule from Company A shown in the table to find the annual rate of interest earned on the investment. (Note: commissions are rounded to the nearest cent.) Principal (Value of Stock) Commission Under $3,000 $25+1.8% of principal $3,000 to $10,000 $37+1.4% of principal Over $10,000 $107+0.7% of principal An investor purchases 250 shares at $12.22 a share, holds the stock for 51 weeks, and then sells the stock for $14.41 a share. Question content area bottom Part 1 The annual rate is enter your response here%. (Round to five decimal places.)
- Sabo Company reported the following shareholders’ equity at year end: 6% noncumulative preference share share capital, P100 par, Liquidation value of P105 per share 1,000,000 Ordinary share capital, P100 par 3,000,000 Retained earnings 950,000 Preference dividends have been paid up to December 31, 2020. What is the book value per ordinary share? a. 131.70 b. 130.00 c. 129.70 d. 128.00Sabo Company reported the following shareholders’ equity at year end:6% noncumulative preference share share capital, P100 par,Liquidation value of P105 per share 1,000,000Ordinary share capital, P100 par 3,000,000Retained earnings 950,000Preference dividends have been paid up to December 31, 2020. What is the book value per ordinary share?Entity A issues $100 million 7% cumulative preference shares. Dividends are payable quarterly subject to the availability of distributable profits. Issue costs are insignificant. The preference shares are puttable at par to Entity A for cash if interest rates move by 150 basis points. Any dividend that remains accumulated and not paid becomes payable when the shares are put to Entity A. Can the put option be separated from the bonds?
- Michelle Company had the following share capital issued and outstanding for the entire current year: 200,000 ordinary shares, P10 par 2,000,000 2,000 12% noncumulative preference shares, P100 par, convertible share into ordinary share 200,000 The net income for the year was P1,800,000, and the income tax rate for the year was 30%. In the computation of basic earnings per share, what is the amount to be used as earnings?ABC company issues 25,000 units, 7% preference shares at price of 98$ each. Cost of issue is 2$ per share. Calculate cost of preference share capital if these shares are issued at par Select one: a. None of them is correct b. 7.7% c. 6.54% d. 7.15% CLEAD MY CH OICEA company issues 10% preference shares with a par value of Sh 100 per share. The current market price of the shares is sh 95. Determine the cost of the preference shares.