The following information relates to a company listed on Luse- Mungwi PLC ZMK Million 4 000 Issued share capital (1000 shares) Share premium. Reserves. Share holders funds. 6% Irredeemable Debentures. 9% Redeemable Debentures. Bank loan. Total Long Term Liabilities. 2 600 290 6,890 2,800 2,900 1.000 6 700 The current cum interest market value per k100 units is k103 and k105 fir the 6% and 9% Debentures respectively. The 9% Debenture is redeemable at par in 10 years time. The bank loan bears interest rate of 2% above the base rate (current base rate is 15%). The current ex-div market price of shares is k1, 100 and a dividend of K100 per share which is expected to grow at a rate of 5% per year has just been paid. The effective corporation tax rate for Mungwi is 30%. Required: A) Calculate the effective after tax weighted Average Cost of Capital (WACC) fir Mungwi PLC

The following information relates to a company listed on Luse- Mungwi PLC ZMK Million 4 000 Issued share capital (1000 shares) Share premium. Reserves. Share holders funds. 6% Irredeemable Debentures. 9% Redeemable Debentures. Bank loan. Total Long Term Liabilities. 2 600 290 6,890 2,800 2,900 1.000 6 700 The current cum interest market value per k100 units is k103 and k105 fir the 6% and 9% Debentures respectively. The 9% Debenture is redeemable at par in 10 years time. The bank loan bears interest rate of 2% above the base rate (current base rate is 15%). The current ex-div market price of shares is k1, 100 and a dividend of K100 per share which is expected to grow at a rate of 5% per year has just been paid. The effective corporation tax rate for Mungwi is 30%. Required: A) Calculate the effective after tax weighted Average Cost of Capital (WACC) fir Mungwi PLC

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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1 Following is the Balance sheet of Jay Limited: Liabilities Equity Shares of Rs. 10 each Retained Earnings } VESHUR 6% Preference Share of Rs.10 each General Reserve Debenture Redemption Fund 5% Debentures Sundry Creditors Total Liabilities Amoun Required: Calculate value per share by using following 1. Yield Method 2. Net Assets Method t 300,000 200000 Assets Fixed Assets Allowances for Depreciation 21 13303 90,000 880,000 200,000 Current assets 5,000 Preliminary Expenses Unwritten Off Discount 25,000 60,000 Amoun t 600,000 (75,000) 340,000 10,000 5,000 Total Assets Current Assets include investments of Rs.50,000 market price of which is Rs.90,000. Debtors included in current assets are doubtful to the extent of Rs.25,000 for which no provision has been made so far. Debenture interest owes for two years and preference dividends are in arrear for two years. Earnings before tax is Rs.280,000 and Tax rate is 35%. The normal rate of dividend is 20%. 880,000
Problem 1 (Adapted)The shareholders’ equity of Yelan Company showed the following account balances on December 31, 2018:Share capital, P100 5,000,000Share Premium 1,000,000Retained earnings 2,000,000Revaluation surplus 800,000 Compute the book value per share on December 31, 2018.
Question 1: The company capital structure consists of debt 230000 at 6.45%, preferred stock 260000 at 15.40% and common stock 170000 at 11.33%, calculate and define the company's weighted average cost of capital
EXAMPLE 10: From the following, compute Debt Equity Ratio: Equity Share Capital 1,00,000 General Reserve 80,000 6.5 % Debentures 75,000 Current Liabilities 90,000 o add notes COMMENTS OTES
The correct ledger entries needed to record the issue of £400,000 £1 shares at a premium of 60p, and paid for by cheque, in full, would be Debit Credit £ £ Share premium Share capital Bank
From the following particulars pertaining to Assets and Liabilities of a company calculate and interpret: a. Current Ratio; b. Liquidity Ratio; c. Proprietary Ratio; d. Debt-Equity Ratio; e.Capital Gearing Ratio. Balance Sheet as on 31st December 2020 Liabilities Amount (Rs) Assets Amount (Rs) 5,000 Equity Shares of Rs 10 each 5,00,000.00 Land & Building 5,00,000.00 8%, 2000 Preference Shares of Rs 100 each 2,00,000.00 Plant & Machinery 6,00,000.00 9 % Debentures of Rs 100 each 4,00,000.00 Sundry Debtors 2,00,000.00 Reserves & Surplus 3,00,000.00 Stock 2,40,000.00 Sundry Creditors 1,50,000.00 Cash in hand 55,000.00 Bank Overdraft 50,000.00 Prepaid Expenses 5,000.00 TOTAL 16,00,000.00 TOTAL 16,00,000.00 don't give hand written answers
The company capital structure consist of debt 380000 @ 4.05%, common stock 220000@12.09% and preferred stock 400000 @ 19.50%, calculate company's weighted average cost of capital Select one: O a. 12.99% O b. 11% O c. 9.50% O d. None O e. 11.99%
Problem 5-7 (IAA) Bronze Company provided the following information at year-end: Share capital Share premium Cumulative translation adjustment - debit Treasury shares, at cost Retained earnings Cumulative unrealized gain on option contract designated as cash flow hedge 6,000,000 3,500,000 2,000,000 700,000 1,500,000 600,000 What is the shareholders' equity at year-end? a. 9,500,000 b. 8,900,000 c. 7,400,000 d. 7,500,000
Analyse the information given in the table below and answer the questions below:Details Company A Company BShare price R60 R90Number of ordinary shares issued 10 000 000 10 000 000Market capitalisation 600 000 000 900 000 000Annual earnings R90 000 000 R120 000 000Earnings per share A BPrice/ Earnings (P/ E) Ratio C DREQUIRED:Please note that all theoretical answers should be in your own words and not directly from yourtextbook or any other source. Remember to add a list of resources (correctly referencedaccording to the Harvard method) at the end of your assignment. Calculate the missing amounts for A ‐ D.Round off your answers to 2 decimal places.
answr with explanation and computation A Company's total number of shares issued and outstanding is 100,000 If the shares were issued 20% above par of P100, how much is the legal capital? a. P 2,000,000 b. P10,000,000 c. P12,000,000 d. P22,000,000
The following are extracts from the Statement of Financial Position dated 30/09/2023: Equity £1 share capital Retained Profit Non-Current Liabilities Debentures Bounce-back Loan 30/09/2023 2 14,605 189,874 59,727 30/09/2022 2 18,389 154,037 80,601 Total dividends of 53,714 were paid to shareholders in the year. How much in total should be shown on the Statement of Cashflows for Financing Activities for the year ended 2023? [NOTE: If negative enter number with a "-" first.]
II. The following is a comparative balance sheet of ABC Co. for December 31, 2022 and 2021: Cash and cash equivalents Accounts receivable Inventories Investment in bonds at amortized cost Equipment Accumulated depreciation Total Assets Accounts payable Bonds payable, due 2025 Ordinary stock, P20 par Share premium Retained earnings Total Liabilities and Equity Additional information: . 2022 250,000 327,600 822,000 0 . 2,400,000 (700,000) 3,099,600 359,000 0 1,800,000 280,000 660,600 3,099,600 2021 220,000 356,000 780,000 200,000 2,040,000 (760,000) 2,836,000 • Net income for 2022, P545,600. Depreciation reported on income statement, P140,000. Fully depreciated equipment, no salvage value, was scrapped. Equipment was purchased for P560,000. Bonds of P400,000 were retired at their face value. 281,000 400,000 1,600,000 200,000 355,000 2,836,000 10,000 shares of ordinary stock were issued for cash of P28 per share. Cash dividends declared and paid, P240,000 Investment in bonds with carrying…

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