The following information relates to ABC Ltd., for the year ended 31st December, 2019.
Sales……………………………………………………………….. Rs.2,000,000.
EBID ………………………………………………………………. 40% of sales.
Ordinary Shares capital of par value Rs.10/each……………… Rs.800,000.
8% Preference shares Capital of par value Rs.100/ each………. Rs.500,000.
10% Bonds payable of par value Rs.1000/each…………………. Rs.400,000.
Reserves and surplus………………………………………………Rs.250,000.
Current liabilities…………………………………………………..Rs.250,000.
Tax rate is 30%.
Market price of share is Rs.20 each.
Dividend payout ratio is 60%.
Required; Compute and comments on each of the following ratios
a)Earning per share. b) Dividend per share.
c)Price earning ration. d) Earning yield ratio.
e)Dividend yield ratio. f) Return on assets.
g)Return on Equity. h) Capital/Assets turn over.
i) Equity multiplier. J) Debt ratio
In: Finance
The Bradford Company issued 10% bonds, dated January 1, with a face amount of $100 million on January 1, 2021. The bonds mature on December 31, 2030 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Required:
1. Determine the price of the bonds at January 1,
2021.
2. to 4. Prepare the journal entries to record
their issuance by The Bradford Company on January 1, 2021, interest
on June 30, 2021 and interest on December 31, 2021 (at the
effective rate).
1. Price of bonds
Journal entry worksheet:
2. Record the bond issuance by the Bradford Company.
3. Record the interest on June 30, 2021 (at the effective rate).
4. Record the interest on December 31, 2021 (at the effective rate).
In: Accounting
The Trailer division of Baxter Bicycles makes bike trailers that attach to bicycles and can carry children or cargo. The trailers have a retail price of $100 each. Each trailer incurs $37 of variable manufacturing costs. The Trailer division has capacity for 26,000 trailers per year and incurs fixed costs of $580,000 per year. Required: 1. Assume the Assembly division of Baxter Bicycles wants to buy 5,700 trailers per year from the Trailer division. If the Trailer division can sell all of the trailers it manufactures to outside customers, what price should be used on transfers between Baxter Bicycles's divisions? 2. Assume the Trailer division currently only sells 9,200 Trailers to outside customers, and the Assembly division wants to buy 5,700 trailers per year from the Trailer division. What is the range of acceptable prices that could be used on transfers between Baxter Bicycles's divisions?
In: Accounting
In: Finance
In addition to? footwear, Kenneth Cole Productions designs and sources? handbags, apparel, and other accessories. You? decide, therefore, to consider comparables for KCP outside the footwear industry. You also know the following about? KCP: it has sales of $518 ?million, EBITDA of $55.6 ?million, excess cash of $100 ?million, $3 million of? debt, EPS of $1.65?, book value of equity of $12.05 per? share, and 21 million shares outstanding.
a. Suppose that? Fossil, Inc., has an enterprise value to EBITDA multiple of 10.93 and a? P/E multiple of 16.59. What share price would you estimate for KCP using each of these? multiples, based on the data for? KCP?
b. Suppose that Tommy Hilfiger Corporation has an enterprise value to EBITDA multiple of 8.89 and a? P/E multiple of 16.38. What share price would you estimate for KCP using each of these multiples based on the data for? KCP?
In: Finance
| Year | 0 | 1 | |
| Revenue | 600.00 | ||
| Fixed costs | 100.00 | ||
| Variable costs | 200.00 | ||
| Additional investment in NWC | 10.00 | ||
| Additional investment in operating long-term assets | 70.00 | ||
| Depreciation | 60.00 | ||
| Interest expenses | 35.00 | ||
| Newly issued debt | 25.00 | ||
| Principle repayments | 15.00 | ||
| Tax rate | 0.40 | ||
| Market value of the firm: | |||
| Price per share | No. of shares | Market value | |
| Short-term debt | 100.00 | ||
| Long-term debt | 600.00 | ||
| Preferred stock | 10.00 | 10 | 100.00 |
| Common stock, equity | 18.00 | 100 | 1,800.00 |
| Total | 2,600.00 | ||
| Cost of equity (Rs) | 0.1500 |
| Growth rate per year from year 1 through year 5 | 0.10 |
| Growth rate after year 5 | 0.07 |
What is the price per share according to the equity free cash flow model?
Select one:
a. $12.33
b. $18.29
c. $15.51
d. $20.87
e. $10.98
In: Finance
| Year | 0 | 1 | |
| Revenue | 600.00 | ||
| Fixed costs | 100.00 | ||
| Variable costs | 200.00 | ||
| Additional investment in NWC | 10.00 | ||
| Additional investment in operating long-term assets | 70.00 | ||
| Depreciation | 60.00 | ||
| Interest expenses | 35.00 | ||
| Newly issued debt | 25.00 | ||
| Principle repayments | 15.00 | ||
| Tax rate | 0.40 | ||
| Market value of the firm: | |||
| Price per share | No. of shares | Market value | |
| Short-term debt | 100.00 | ||
| Long-term debt | 600.00 | ||
| Preferred stock | 10.00 | 10 | 100.00 |
| Common stock, equity | 18.00 | 100 | 1,800.00 |
| Total | 2,600.00 | ||
| Cost of equity (Rs) | 0.1500 |
| Growth rate per year from year 1 through year 5 | 0.10 |
| Growth rate after year 5 | 0.07 |
What is the price per share according to the equity free cash flow model?
Select one:
a. $18.29
b. $10.98
c. $15.51
d. $20.87
e. $12.33
In: Finance
Stock Option problem
At the start of the year a business grants five key personnel 300 stock options each. The fair value (FV) of each option at the date of grant is 7.00. The options vest at the end of a 3 year period at which point the option holders can exercise their options. This means no partial vesting during the three year period; the options vest 100% at the end of three years. This will not change the allocation of the expense over the vesting period.
The exercise (strike) price is the same as the share price at the date of grant which is 20.00 and the par of each share is 1.00.
In: Accounting
The PROCOM Corporation is planning its financing for the next six months. PROCOM makes one item, which it sells through the retail shop in the front of the factory. The planning process was started with profit-and loss computations. Profit is revenue less expenses and revenue is quantity times the unit price. Expenses are made up fixed costs and variable costs. Fixed costs include: rent, salaries, and utilities. Variable costs depend directly on the quantity. These costs are materials and labor. The following represents planning figures for the next six months. Using D-cide, find the profit for the next six months and export the results into an excel spreadsheet.
Planning period: Six Months
Unit Price: $500
Quantity: 20,000 Up 5% Monthly
Fixed Costs:
Rent: $40,000
Salaries: $200,000
Utilities: $50,000 Down 2% Monthly
Variable Costs:
Unit Material: $200
Unit Labor: $100 Up $5 monthly
In: Accounting
A small economy produced and consumed only two goods (computers and pies) in Year 1 and Year 2, in the amounts shown in the table below.
[Read the next sentence very carefully.] Year 1 is the base year for all calculation purposes in this question, and we also assume that the official market basket for the CPI is the actual mix of output produced in Year 1.
|
Computers |
Pies |
|||
|
Quantity |
Price |
Quantity |
Price |
|
|
Year 1 |
30 |
$1000 |
100 |
$10 |
|
Year 2 |
40 |
$1100 |
110 |
$10 |
In: Economics