. A cooperative has an approved capital of P1M, the maximum share capital a member can invest is: Group of answer choices a. 10% of P1M b. 25% of P1M c. 20% of P1M d. 30% of P1M
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77. A cooperative has an approved capital of P1M, the maximum share capital a member can invest is:
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- Review this situation: Transworld Consortium Corp. is trying to identify its optimal capital structure. Transworld Consortium Corp. has gathered following financial information to help with the analysis. Debt Ratio 30% 40% 50% 60% 70% Equity Ratio 70% 60% 50% 40% 30% WACC 9.71% 9.55% 10.02% 7.55% 11.30% 10.78% 8.24% 12.80% 11.45% rd Is 6.02% 9.40% 6.75% 9.750% 7.15% 10.60% Which capital structure shown in the preceding table is Transworld Consortium Corp.'s optimal capital structure? Debt ratio= 30%; equity ratio = 70% Debt ratio = Debt ratio = 70%; equity ratio = 30% Debt ratio= 50%; equity ratio = 50% 60%; equity ratio = 40% Debt ratio = 40%; equity ratio = 60%ECRI Corporation is a holding company withfour main subsidiaries. The percentage of its capital invested in each of the subsidiaries(and their respective betas) are as follows:Subsidiary Percentage of Capital BetaElectric utility 60% 0.70Cable company 25 0.90Real estate development 10 1.30International/special projects 5 1.50a. What is the holding company’s beta?b. If the risk-free rate is 4% and the market risk premium is 5%, what is the holdingcompany’s required rate of return?c. ECRI is considering a change in its strategic focus; it will reduce its reliance on theelectric utility subsidiary, so the percentage of its capital in this subsidiary will bereducedto 50%. At the same time, it will increase its…2. A company has share capital of Kshs 20 million and is planning to invest an additional fund of Kshs 16,000,000 towards its expansion programme. Suggest the best option from the following, from a tax point of view: 1. To issue share capital of Kshs 16,000,000. 2. To borrow Kshs 4,000,000 @ 18% pa and to issue debentures of Kshs 4,000,000 @ 11% pa and the balance amount be collected by issuing shares in the public. 3. To issue debentures for Kshs 10,000,000 @ 11% pa and the balance be collected by issuing shares in the public. 4. Rate of return is 30% before paying any interest and tax. Rate of tax is 30%
- Assume you are advising an investor from Oman, who is interested in investing his money locally or internationally. As a portfolio manager you are advising your client the following asset allocation : 1. Fixed Income and Bonds 50% and 2. Equities 50% Mention ways in which you can invest in each asset class, and explain the investment you selected in brief ( in two lines) (example: in the bond asset class, debentures is one type of investment) For each asset class three types of investments and their related explanation is required.18- What sources of long-term capital do firms use? A. Long-term debt B. Preferred stock C. Common stock D. All of the above 19- The component cost of common equity raised by retaining carnings is: A. ko В. К. C. ke D. ks 20- Increasing the value of the combined firms more than the sum of the individual firms taken separately is known as: A. Risk management B. Maintaining control C. Synergy D. DiversificationFlag question If Capital Provider (C1) provides OR 196000 to Entrepreneur 1 (E1) and agreed on Profit Sharing Ratio (PSR) of 80:20 respectively. Let say the profit from the business venture is OR 12000. Determine how much C1 will recover back by the end of this transaction Dreviou
- Please answer all 4 parts with explanations thxDetermine Garneau's optimal capital structure based on the following information: Debt EPS DPS Stock Price 20% 2.2 1.1 40.12 30% 2.4 40% 2.6 50% 2.8 Equity 80% 70% 60% 50% O a. 20% debt; 80% equity O b. 40% debt; 60% equity O c. 50% debt; 50% equity O d. 30% debt; 70% equity 1.2 1.3 1.4 41.34 40.52 39.42Which of the following capital structures has the highest EBIT-EPS break-even point compared to an all equity capital structure? of Select one: O a. 50% debt/50% equity ion O b. 25% debt/75% equity O c. 95% debt/5% equity O d. 75% debt/25% equity
- Multiple choice: Assuming that a company’s project is to be funded as follows: 40% from bank loan, 30% from issuance of ordinary shares, and 30% from issuance of preference shares. Per company’s computations, the after tax cost of capital are as follows: 10%, 20% and 12% for bank loan, ordinary shares, and preference shares, respectively. If the tax rate is 30%, which cost of capital (rounded off) should the company use? • 10%• 5%• 30%• 14%The company requires P1,000,000 for its proposed plan. The following financial alternatives are available:● Plan I: 100% Equity Capital (Face Value P100)● Plan II: 50% Equity Capital (Face Value P100) and 50% Debenture (interest rate 6%)● Plan III: 50% Equity Capital (Face Value P100) and 50% Preference Shares (rate of dividend 6%)● Plan IV: 25% Equity Capital (Face Value $100), 25% Debentures (interest rate 6%), and 50% Preference Shares (rate of dividend 6%) The rate of tax applicable to the company is 50%. The company expects an EBIT of P4,000,000. Calculate the indifference point of EBIT between Plan I and Plan III. Plan I: There is no fixed financial charge (debenture interest or preference dividend). Therefore, there is no financial break-even. Plan II: Fixed financial charges amount to P30,000 (interest on debentures). Therefore, the financial break-even is P30,000.Plan III: In the case of Plan III, the fixed financial charge is P30,000 (preference dividend).…A private equity fund is targeting the acquisition of a warehouse located in Irving, Texas. Its research of the Irving market reveals the following: Property Type Cap Rate Vacancy OpEX (% of EGI) Retail 10.05% 6.17% 40.44% Office 8.65% 5.58% 48.74% Multifamily 7.26% 4.98% 53.72% Industrial 11.44% 6.77% 30.68% • If the projected first year net operating income (NOI) for the Irving warehouse is $44,500, what is the estimated value of the property using direct capitalization?
