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I think we should use option 2 because we have not gained control, that is still an associate. Therefore we should realise gain at acquisition date.
do you have a soft copy? please nivenmwenifumbo@yahoo.com
cost of preference=interest/market value of a preference share.
About convertable shares ar shares that can be converted into shares but cannot be converted back to debt
Thats what i can say about those twosteve…u need to send policemen to search for me because iam lost here…where did u get the 825? I do understand the concept but imediately u mentioned 825…i got lost,help please
preference shares is not part of debt calculation,cost of preference is calculated as interest/market value of preference shares.
Cost of Preference shares is another component of wacc,so treat it seperatelypreference shares is not part of debt calculation,cost of preference is calculated as interest/market value of preference shares.
Cost of Preference shares is another component of wacc,so treat it seperatelyhey i have kaplan mock exam and answers for all papers,just give me your email address and i send it to you,if u still dont understand how they answered it,u can contact me and i’ll explain
hey i have mock exam and answers for all papers,just give give me yo email address and i send it to you,if u still dont understand how they answered it,u can contact me and i’ll explain
hey i have mock exam and answers for all papers,just give give me yo email address and i send it to you,if u still dont understand how they answered it,u can contact me and i’ll explain
hey i have mock exam and answers for all papers,just give give me yo email address and i send it to you,if u still dont understand how they answered it,u can contact me and i’ll explain
hey i have mock exam and answers for all papers,just give give me yo email address and i send it to you,if u still dont understand how they answered it,u can contact me and i’ll explain
hey i have mock exam and answers for all papers,just give give me yo email address and i send it to you,if u still dont understand how they answered it,u can contact me and i’ll explain
hey i have mock exam and answers for all papers,just give give me yo email address and i send it to you,if u still dont understand how they answered it,u can contact me and i’ll explain
hey i have mock exam and answers for all papers,just give give me yo email address and i send it to you,if u still dont understand how they answered it,u can contact me and i’ll explain
market capitalisation is the market value of the company.
This is calculated by using dividend valuation model,price earnings ratio…just study business valuation and u’ll know it
Note: this is highly examinable because i have checked the exams for the last 5years and its been examinedmarket capitalisation is the market value of the company.
This is calculated by using dividend valuation model,price earnings ratio…just study business valuation and u’ll know it
Note: this is highly examinable because i have checked the exams for the last 5years and its been examinedok,tax is payable one in arreas,so tax will not be paid in first year and you cant discount the amount which is not there, tax for year one will be paid in the following year and therefore discounted in year2,so year2 tax will be paid in 3rd year and discount and so on..thats why it has reached the 5th year. I would have answered those other questions its just that am using a 2010 revkit
ok,tax is payable one in arreas,so tax will not be paid in first year and you cant discount the amount which is not there, tax for year one will be paid in the following year and therefore discounted in year2,so year2 tax will be paid in 3rd year and discount and so on..thats why it has reached the 5th year. I would have answered those other questions its just that am using a 2010 revkit
ok,tax is payable one in arreas,so tax will not be paid in first year and you cant discount the amount which is not there, tax for year one will be paid in the following year and therefore discounted in year2,so year2 tax will be paid in 3rd year and discount and so on..thats why it has reached the 5th year. I would have answered those other questions its just that am using a 2010 revkit
the discount factor is suppose to be from year2-year5,so check if they subtracted the df of year1 from the 5year annuity factor to arrive at that figure
vd is the value of debt
T is tax
Since debt is always tax deductable, and if tax percentage is,say 30%,then debt is definately going to be reduced by 30%,which is 100%-30% so in case of using vd(1-T), it will be vd(1-0.30),its just the same as multiplying debt by 70%.
U can ask as many questions on this one if u still dont get ithey shelley,
Well have tried to do the calculations as follows.
Profit after tax is $6m
Dividend payout ratio is 25%
Current year’s dividend=$6m*25%=$1.5m
Growth is 4%
Using dividend valuation model
Mv=Do(1+g)/ke-g
Do is the current year’s dividend which is $1.5m
G is 4%
So mv=$1.5(1+04)/(0.10-0.04)=$26m
So market value per share is $5.20Rights issue price will be $5.20*60%=$3.12
Since funds raised from rights issue is $10m, then number of additional shares issued through rights issue is 3205128.
Hope this will make sensehey shelley,
Well have tried to do the calculations as follows.
Profit after tax is $6m
Dividend payout ratio is 25%
Current year’s dividend=$6m*25%=$1.5m
Growth is 4%
Using dividend valuation model
Mv=Do(1+g)/ke-g
Do is the current year’s dividend which is $1.5m
G is 4%
So mv=$1.5(1+04)/(0.10-0.04)=$26m
So market value per share is $5.20Rights issue price will be $5.20*60%=$3.12
Since funds raised from rights issue is $10m, then number of additional shares issued through rights issue is 3205128.
Hope this will make sensehey aodaro,
Well you dont need to make the marker to start wondering where you u got those figures from,instead calculate all of them to show him that you know what you are doing. The other reason for showing your workings is that you might make an arithmetic error in adding up totals,if the examiner can see how you were calculating,he can be able to give you you marks because you know what you are doing.have a good day
