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market value

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › market value

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.
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    Posts
  • September 4, 2021 at 4:29 pm #634319
    Nikitagarwal
    Participant
    • Topics: 153
    • Replies: 146
    • ☆☆☆

    The following are extracts from the statement of financial position of a company:
    $’000 $’000
    Equity
    Ordinary shares 8,000
    Reserves 20,000
    28,000
    Non-current liabilities
    Bonds 4,000
    Bank loans 6,200
    Preference shares 2,000
    12,200
    Current liabilities
    Overdraft 1,000
    Trade payables 1,500
    2,500
    42,700
    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?

    September 5, 2021 at 9:35 am #634396
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51582
    • ☆☆☆☆☆

    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

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