- This topic has 1 reply, 2 voices, and was last updated 1 year ago by .
- You must be logged in to reply to this topic.
PQ Awards Nominations
Please help us to win one of the PQ Magazine awards and send in the voting form >>
You can nominate us in any or all of the following categories: Online College of the Year, Study Resource of the Year, Private Sector Lecturer of the Year, and Accountancy Personality of the Year.
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
The following are extracts from the statement of financial position of a company:
Ordinary shares 8,000
Bank loans 6,200
Preference shares 2,000
Trade payables 1,500
The ordinary shares have a nominal value of 50 cents per share and are trading at $5.00 per share. The
preference shares have a nominal value of $1.00 per share and are trading at 80 cents per share. The bonds
have a nominal value of $100 and are trading at $105 per bond.
What is the market value based gearing of the company, defined as prior charge capital/equity?
why is prior year charge capital said in BPP kit that pref shares is 1.6m?
The market value of the preference shares is 80c per share, so the total market value is 2,000,000 x 80c = $1,600,000