39. Evergreen Company has the choice of raising the additional sum of Rs. 50 lacs either by the sale of 10 % percent debentures, or by issue of additional equity shares of Rs. 50 per share. structure of the company consists of 10 lacs ordinary shares and no debt. At what level of earnings before interest and tax (EBIT) after the new capital is acquired would earnings per share (EPS ) be the same, whether new funds are raised by issuing ordinary shares or by issuing debentures Assume 50% tax rate. The current Capitalization

39. Evergreen Company has the choice of raising the additional sum of Rs. 50 lacs either by the sale of 10 % percent debentures, or by issue of additional equity shares of Rs. 50 per share. structure of the company consists of 10 lacs ordinary shares and no debt. At what level of earnings before interest and tax (EBIT) after the new capital is acquired would earnings per share (EPS ) be the same, whether new funds are raised by issuing ordinary shares or by issuing debentures Assume 50% tax rate. The current Capitalization

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

1. What is the amount of dividend per share that MOONSTONE paid on March 31, 2021? 2. How much is the ordinary share capital, December 31, 2021? 3. How much will is the total cash dividends paid during the year 2021? 4. Number of fractional warrants outstanding as of December 31, 2021 5. How much is the retained earnings appropriated for contingency loss?
Following particulars have been extracted from the balance sheet of Sitara Industries Ltd. as on 31 December 2001: Liabilities and Capital Amount Rs. Authorized capital: (200,000 ordinary shares of Rs. 10 each) Paid-up capital: (100,000 ordinary shares of Rs. 10 each) Reserve Fund Rs.750000 and Profit and Loss A/C Rs.300000 The Board of Directors recommended issuing bonus share at Rs.15 share of Rs. 10 each for every 50 share held at present. For this purpose equally amount provided from reserve fund and profit and loss A/C. The Board also recommended issuing right shares of the company @30 shares of Rs.10 each for every 50 shares at the premium of 30% share. The approval of the controller of the capital issue had already been obtained. Required: Make the necessary Journal entries to the effect of recommendation of the board of directors and show how would be effect the Balance Sheet You are also required to solve above question with your arid no 6 digit taking as paid up capital…
6. GAMORA Corporation’s shareholders’ equity is composed of 10,000, ₱10 par ordinary shares, ₱40,000 share premium, and accumulated profits of ₱600,000. If a 40% bonus issue is declared when the shares are selling for ₱50 per share, what amount should be transferred from the accumulated profits account to the share premium account? * ₱ 40,000 ₱ 200,000 ₱ -0- ₱ 160,000
The owners’ equity account for Rantuil Utilities Berhad are shown below: Common Share (RM2 par) - RM30,000Capital Surplus - RM285,000Retained earnings - RM648,100Total shareholder’s equity - RM963,100 If Rantuil Utilities Berhad currently sells for RM30 per share and a 10 percent share dividend is declared,i. Determine the number of new shares that will be distributed.ii. Reconstruct new owners’ equity account for Rantuil Utilities Berhad.
17. The asset and liabilities of a corporation are 100M and 20M, respectively. There are 10M shares outstanding whose market price is $10 per share. EPS for the year is $2. The book ROE for this corporation is ____ and the market ROE is ____. A. 25% / 20% B. 15% / 20% C. 20% / 25% D. 20% / 20% E. 25% / 15%
Please answer asap! UPVOTE will be given! No long explanation needed. GMA Corp. has 500,000 shares authorized and has the following information at the end of its first year of operation: Share Capital, ₱50 par value: ₱754,000 Subscribed Share Capital: ₱343,000 Subscription Receivable: ₱155,000 Share Premium: ₱85,000 How many shares have been issued?
Please answer asap! UPVOTE will be given! No long explanation needed. GMA Corp. has the following information in its shareholders’ equity: Ordinary Share Capital, ₱100 par value: ₱1,000,000 Subscribed Share Capital – Ordinary: ₱200,000 Subscriptions Receivable – Ordinary: ₱56,000 Share Premium – Ordinary: ₱32,000 Treasury Shares – Ordinary: ₱10,000 Accumulated Profits: ₱150,000 How much is the contributed capital?
AlMazoon Co has issued 60,000 ordinary shares (equity shares) of OMR 0.600 baisa each and 30,000 6% preference shares of OMR 1 each. Its profits after taxation for the year 2021 were OMR 22,100. The directors have decided to pay OMR 4,100 as ordinary dividend. You are required show: 1. The amount paid as dividends 2. The amount of retained profits 3. The balance of retained earning at the year end assuming the company had an opening balance of RO 30,000. 4. The dividend per share on ordinary shares.
Please explain in detail
Junior plc is a company that, during the year ended 31 December 2020, paid $25,000 debenture interest and paid an ordinary dividend of 8 pence per share on 1 million £1 ordinary shares. The retained profit for the year was $160,000. What was Junior plc's profit for the year? Select one: a. $80,000 b. $215,000 c. $240,000 d. $265,000
13 - On 04.05.2020, our enterprise sold 1,000 of the shares of Kardemir A.Ş., which it had purchased for a temporary investment of 12 TL, for 15 TL each, and after paying a commission of 250 TL to the relevant bank, the remaining amount was deposited into the bank account of the enterprise. Which of the following calculations is incorrect? a) 653 Commission Expenses Hs. 250 TL Borrowed B) 110 Stocks Hs. 12.000 TL Creditor NS) 655 Securities Sales Profits Hs. 3.000 TL Creditor D) 102 Banks Hs. 14.750 TL Debtor TO) 645 Securities Sales Profits Hs. 3.000 TL Debtor
NEED ASAP. Solve correctly and show your computations. The ABC Corp has the following classes of share capital outstanding as of Dec 31, 2021. Ordinary share capital, P20 par value, 20,000 shares outstanding Preference share capital, 5% P100 par value, non-cumulative and fully participating, 2,000 shares outstanding No dividends were paid on Preference shares for two years. On Dec 31, 2021 a total Cash dividend of P210,000 was declared. How much dividends will be received by the preference shares holders? a. 73,333 b. 38,222 c. 38,000 d. 120,000

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS