ARWIN CO

How to calculate spread in the calculator? Because every time it doesn't give the right answer neither in standard calculator nor in scientific calculator? Arwin plans to raise $5m in order to expand its existing chain of retail outlets. It can raise the finance by issuing 10% loan stock redeemable in ten years’ time, or by a rights issue at $4.00 per share. The current financial statements of Arwin are as follows: Statement of profit or loss for the last year $000 Sales revenue 50,000 Cost of sales 30,000 –––––––– Gross profit 20,000 Administration costs 14,000 –––––––– Profit before interest and tax 6,000 Interest 300 –––––––– Profit before tax 5,700 Taxation at 30% 1,710 –––––––– Profit after tax 3,990 –––––––– Changes in equity $000 Dividends 2,394 Net change in equity (retained profits) 1,596 Statement of financial position $000 Net non?current assets 20,100 Net current assets 4,960 –––––– 25,060 –––––– Ordinary shares, nominal value 25¢ 2,500 Retained profit 20,060 12% loan stock (redeemable in six years) 2,500 –––––– 25,060 –––––– The business expansion is expected to increase sales volumes by 12% in the first year, with no change in sales price. Variable cost of sales makes up 85% of cost of sales. Administration costs will increase by 5% due to new staff appointments. Arwin has a policy of paying out 60% of profit after tax as dividends and has no overdraft How to calculate Debt finance under equity?