Question 5 Star Game Plc is a big provider of animated games in the UK . The company is growing, and the top managers are proposing to expand the business and open new branches to meet the increasing demand. Thus, they are looking for ways to finance the company's expansion. The company's authorised share capital is 60 million shares, £3 each. The following is an extract from the statement of financial position of Star Game Plc as at 31 December 2021: £m Called up equity share capital, £3 each 90 Share premium account 30 Retained earnings 28 6% debentures 70 The fund required for the new expansion plan is estimated at £30 million. Star Game Plc managers are considering three options to finance this plan: ordinary share issue, issuing more debentures o using retained earnings. At the same time, they intend to maintain an acceptable debt ratio. Required: a) Critically evaluate the advantages and disadvantages of using each of the three finance options and advise Star Game Plc management on the best way to finance their expansion. Your answers should be linked to the details extracted from the statement of financial position above. b) If the company wants to make a rights issue of 3 share for every 9 shares held at £4.5 per share. Calculate the number and nominal value of the rights issue shares and the amount of money raised. c) What are the differences between a rights share issue and a new

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Question content area top Part 1 Assume Gillette Corporation will pay an annual dividend of $ 0.66 one year from now. Analysts expect this dividend to grow at 11.2 % per year thereafter until the fifth year. Thereafter, growth will level off at 1.6 % per year. According to the DDM, what is the value of a share of Gillette stock if the firm's equity cost of capital is 8.3 % ? Question content area bottom Part 1 The value of Gillette's stock is $ enter your response here. (Round to the nearest cent.

Question 10 (2 points) A firm has 1 million shares outstanding. After-tax earnings have been constant at $5 per share. The firm retains 40% of earnings and pays out the rest in dividend. The shareholder's required rate of return is 15%. Calculate the current share price. $50 $20 $30 $10 $40

QUESTION 7 Manchester plc is expected to pay annual dividends of £1.50, £1.75 and £2.00 per share at the end of each of the next three years (i.e., from t-1 to t=3). After year 3, annual dividends are expected to grow at a rate of 2% forever. Assuming that shareholders of Manchester plc. require a rate of return equal to 5% per year, what is the fair value for the share of Manchester plc.? O £95.52 £64.70 O £48.37 O £63.48

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Question 5 FLAG QUESTION 1 Scooter Madness (SM) has 10,000 shares outstanding and is expected to have Net Income of $70,000 in year 1. SM expects to retain 35% of its earnings to invest in projects at the end of year 1. If the expected share price 1 year from today after any dividend issued is $65 and SM's return on equity capital is 16%, what would you expect the share price to be today? (round to the nearest cent: $x.xx) Answers 1-1 1. VERSION 2M.6.4 Previous

Question 2 You have been appointed as a financial consultant by the directors of Baron Holdings. They require you to determine the cost of capital of the company. The following information is available on the capital structure of the company: ü 1 500 000 ordinary shares, with a market price of R3 per share. The latest dividend declared was 86 cents per share. A dividend growth of 15% was maintained for the past 5 years. ü 1 000 000 11%, R1 preference shares, with a market value of R3 per share. ü R1 000 000 9%, debentures due in 7 years and the current yield-to-maturity is 10%. Note that the current price of the debenture is R951 356 ü R700 000 14%, bank loan, due in December 2021. Additional information: - The company has a tax rate of 30%. - The beta of the company is 1.7, a risk free rate of 5% and the return on the market is 14%. Required: 2.1 Calculate the weighted average cost of capital. Use the Gordon Growth Model to calculate the cost of equity 2.2 Calculate the cost of…