1. What is the weighted average number of ordinary shares The net income was P35,000,000 and the entity did not declare At the beginning of current year, Buraka Company had 480,000 P60 par value ordinary shares and 100,000, 10% PI0 par value convertible cumulative preference shares outstanding. The preference shares are convertible into 100,000 ordinary shares before share dividend and share split. During the current year, the following transactions affected the ordinary shares: February 1 Issued 120,000 shares March 1 Issued a 20% share dividend 1 Acquired 100,000 treasury shares 1 Issued a 3 for 1 share split October 1 Reissued 60,000 treasury shares Мay June dividend on preference shares. outstanding? а. 1,939,000 b. 1,969,000 c. 1,860,000 d. 1,800,000 ner 2 Jan
Cost of Capital
Shareholders and investors who invest into the capital of the firm desire to have a suitable return on their investment funding. The cost of capital reflects what shareholders expect. It is a discount rate for converting expected cash flow into present cash flow.
Capital Structure
Capital structure is the combination of debt and equity employed by an organization in order to take care of its operations. It is an important concept in corporate finance and is expressed in the form of a debt-equity ratio.
Weighted Average Cost of Capital
The Weighted Average Cost of Capital is a tool used for calculating the cost of capital for a firm wherein proportional weightage is assigned to each category of capital. It can also be defined as the average amount that a firm needs to pay its stakeholders and for its security to finance the assets. The most commonly used sources of capital include common stocks, bonds, long-term debts, etc. The increase in weighted average cost of capital is an indicator of a decrease in the valuation of a firm and an increase in its risk.
What is the weighted average number of ordinary shares outstanding?
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