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Hi,
I’m currently working on Tin Co (Mar/Jun 2018) Part a iii) – I can’t seem to work out where the 6% of the finance costs come from?Thank you.
Hi,
Sorry, for the confusion, i should have been clearer.
The question a (iii) Assuming debt finance is used, calculate the revised earnings per share after the business expansion. (3 marks)
The finance cost interest = 475 (=315+160)
The extra interest is 160, which according to the answer it’s 2000 x 6%, which i don’t understand as 2000 x 6% = 120 not 160. and i don’t know where the 6% comes from?Please, can you help me?
So
It’s the 2 million in debt at 8% which gives 160(000)So its raising either debt or equity for 2 million
Through 8% loan notes .. so the extra interest is 2m * 8% = 160,000I cannot see 6%?
Which answer are you looking at?
Look at the ACCA answer which you can locate
ACCA March/June 2018 Sample Answers
Go to ACCA, look for exam papers and look at /fm-2018-marjun-hybrid-a.pdf
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