None You are given the following information regarding Green Packaging Solutions (Pty) Ltd's funding structure:7 500 bonds issued with a nominal value of R1 500 each and time to maturity of 15 years. It pays an annual couponrate of 11% per annum and the current market return on similar bonds with a maturity date of 15 years is 12% perannum (pre-tax). 500 000 ordinary shares are in issue with a nominal value of R45 per share. The next dividendpayable will be R9 per share. It is expected that dividends will have a long-term sustainable growth rate of 5%. Theshares have a current market value of R80 per share.The corporate tax rate is 28%Determine the total market value of equity for Green Packaging Solutions (Pty) Ltd? Set your calculator to four decimalplaces and round the final answer to the nearest rand. If slight rounding differences occur - choose the alternativethat is closest to your answer.(a) R 600 000(b) R 3 000 000(c) R22 500 000(d) R40 000 000

The total market value of equity can be obtained by multiplying the number of shares by the nominal…

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 17P

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