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NG-CO DEC 09 PART D

This topic has 1 reply, 2 voices, and was last updated 10 years ago by John Moffat.

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November 9, 2014 at 5:28 pm #208647
armaghanbutt
Member
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sir ! my prob is they will be receiving or paying 20%? as it is return they should receive .. and 13m multiply20% =2600000, but in solution is 260000 ..they divided by 10 p/e ratio?
November 9, 2014 at 5:59 pm #208666
John Moffat
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- Topics: 57
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Part (d) is looking at the interest to be paid.
The debt raised is 50% x 13M = 6.5M
The interest is 8%, which is 8% x 6.5M = 520,000 p.a..
It is payable half-yearly and so is 260,000 every 6 months.
(It has nothing to do with the PE ratio).
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