The board of directors of Moon plc decided at present (year 0)
to dissolve the company...
The board of directors of Moon plc decided at present (year 0)
to dissolve the company in two years (year 2). The company has
20,000 shares in circulation and the cost of capital is 9 percent.
This is an all-equity firm and the Chief Financial Officer knows
with certainty the future cash flows. The company expects to
receive $10,600 in year 1 and another $108,000 in year 2. All cash
flows received by the company will be distributed as
dividends.
Calculate the current share price ignoring taxes. Suppose you
own 200 shares in Moon plc and your preference is to have equal
dividends in year 1 and year 2. Explain how you can achieve this by
creating homemade dividends. Show how your desired position can be
achieved. Calculate the present value of your cash flow under the
original scenario and also the case of equal dividends
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a. The board of directors of Moon plc decided at present (year
0) to dissolve the company in two years (year 2). The company has
20,000 shares in circulation and the cost of capital is 9 percent.
This is an all-equity firm and the Chief Financial Officer knows
with certainty the future cash flows. The company expects to
receive $10,600 in year 1 and another $108,000 in year 2. All cash
flows received by the company will be distributed as...
The directors of Hanren Plc, a listed company, have decided to
update the processing equipment at their division based in South
Wales. The project named ‘Invector’ will need new equipment costing
£10.5 million.
The equipment would last for five years, at the end of which it
would be replaced. The scrap value of the equipment is expected to
be 4% of the initial cost.
Capital allowances would be available on the cost of the equipment
on a 20% reducing balance...
Lundin PLC
Lundin plc operates a number of divisions, but the board of
directors has been considering closing those that no longer fit
into the future plans of the company. On 30 November 2015 (year end
is 31 December 2015), the board decided to close two of the
Divisions (Division A and Division B), make the employees redundant
and to realise the assets of the divisions as quickly as possible.
A detailed plan for closing down Division A was published...
In the 2020 accounting year,
The board of directors of some manufacturing and services
companies decided to pay stock dividends instead of cash
dividends.
On the other hand, the board of directors of majority of
companies within the ICT industry decided to pay special cash
dividends.
It was also observed that some the management of some companies
had decided to repurchase shares while others were engaging in
stock splits.
What could be the reason for these decisions and choice of...
Alpha LLC a computer design and manufacturing company at Sohar. The
Board of directors decided to install a management accounting
system in the organization to support critical decisions making. As
a management accounting student, critically evaluate, how
management accounting system influences the process of critical
decision making of Alpha LLC. Justify your answer with appropriate
examples.
Alpha LLC a computer design and manufacturing company at Sohar.
The Board of directors decided to install a management accounting
system in the organization to support critical decisions making. As
a management accounting student, critically evaluate, how
management accounting system influences the process of critical
decision making of Alpha LLC. Justify your answer with appropriate
examples.
At a meeting of the board of directors of Barby Limited it was
decided :
1. To redeem the redeemable preference shares of the company on
30 September 2006.
2. To achieve this by a fresh issue of the maximum number of
ordinary shares of permissible without the necessity of calling a
meeting of shareholders.
3. That the issue price for the proposed issue would be R1, 20
per share
4. That the redemption should be made in such a...
Nielser Plc has engaged a consultant following the approval
by
the Board of Directors. The Consultants prepared the
following
information for the projected year for 2020.
Nielser Plc, which manufactures Spectacles, will have an
expected
unit sales increased by 5% in quarter 1, 10% in Quarter 2, 7%
in
Quarter 3 and 4% in Quarter 4.
i. It is expected that due to fluctuating demand during the
year
the Price/ Unit will be at K2,500 per Unit in the 1st...
The directors of Bodurm plc have decided to adopt a policy of
revaluing all its buildings to reflect current fair values. The
fair value of the buildings is determined by an independent
surveyor to be £2,625,000 as at 30 April 2020. The revaluation does
not give rise to a deferred tax liability.
Discuss the requirements of IAS 8 “Accounting Policies,
Changes in Accounting Estimates and Errors” in relation to
Bodurm plc’s new accounting policy in relation to the measurement
of...
The Board of Directors of Samsung has decided to raise funds
through the capital market in order to finance the international
expansion business plan. State two (2) advantages and (2)
disadvantages of raising funds from the capital market as compared
to raising funds from the money market.
Running a business as a non-listed company is different than
running a business as a listed company. One of the issues that you
now have to deal with as a listed company is...