5Ben's net assets were £450,000 and this company owns 30% of Jon which generatedprofits of £40,000 and shareholder funds of £120,000 by the year end. When reportinggroup results, by how much will Ben's net assets increase.A) 12,000B) 36,00048,000ABCDNone of these6Joe's gearing is 40%. Annual interest charged on his 10% loan stock amounted to£60,000 this year, and Joe has 450,000 £1NV shares in issue. Retained earnings will beNearestA) 350,000B) 400,000450,000D) None of these7Following a 1:5 rights issue that was fully taken up and raised £10,000, Len has 60,000£1NV shares in issue. Pre-rights share prices were 160p. Calculate the post-rights price.A)133pB)150p160pNone of these8Ted revalued a plant to £80,000 at the start of the year. The plant had cost £50,000 and ishalf-way through its useful working life. Straight line depreciation of 10% p.a. is used.Calculate the revaluation reserve balance at year-end.A) £24,000B) £28,000C)£32,000D) None of these

1. Ben's Net Assets IncreaseBen's net assets were £450,000.Ben's company owns 30% of Jon's company,…

Answered: 5 Ben's net assets were £450,000 and…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 1BCRQ

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an investo holds 500 shares in XYZ Ltd a qouted company which has been paying average divindeds of sh 2.00 per share per annum in recent years. The dividends are expected to gow at a rate of 15% per annum over the coming three years, then at a rate of 10% over the next three years and finally at rate of 5% per annum to perpertuity. Given that the cost of capital is 10% Determine the value of 500 shares in XYZ using the dividended growth model
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
Q1. Alpha Corporation reported the following financial details for the financial year 2021. Revenue is $250 million. EBITDA margin is 45%, EBIT margin is 25%. D&A is $10 million. Interest expense is $5 million. Interest & dividend income is $15 million. The firm sold an asset that has a book value of $33 million, for $30 million. The tax rate applicable for the firm is 20%. The basic number of shares were 5 million, and diluted number of shares were 5.25 million. a) Show the required workings to determine the basic EPS and diluted EPS for 2021. b) The Board of Directors of Alpha Corporation decided to declare 40% of net income as dividend for the financial year 2021. An investor holds 350 shares of Alpha Corporation. Determine the dividend income received by the investor. How much funds will be added to the retained earnings account for 2021.
Answer
The Distance Plus parnership has the following capital balances at the beginning of the current year. Tiger (40% of profits and losses) $65,000 Phil (20%) $35,000 Ernie (40%) $50,000 Each of the following questions should be viewed independently. a. If Sergio invests $70,000 in cash in the business for a 30% interest, what journal entry is recorded. Assume the bonus method is used. b. If Sergio invests $60,000 in cash in the business for a 30% interest, what journal entry is recorded. Assume the bonus method is used. c. If Sergio invests $72,000 in cash in the business for a 30% interest, what journal entry is recorded. Assume the goodwill method is used.
he Net Profit of ABC company for the year 2019 was OMR 11,400. The company issued 40,000 6% preference shares of OMR 1 each. What will be the Net Profit after distributing preference dividend? a. OMR 0 b. OMR 9,000 c. OMR 10,000 d. OMR 13,800\
9.5 YZA owns 40% of EFG. Opening net assets of each firm were £48,000 & £35,000 respectively. Profits for the current year are £28,000 and £15,000 respectively. YZAs net assets at year-end (in thousands) will be nearest
Hassel Inc.'s would like to undertake a policy of paying out 45% of its income. Hassel’s latest net income was P1,250,000, and it had 225,000 shares outstanding. What dividend per share should Hassel declare? * Choices: P2.63 P2.14 P2.38 P2.50 P2.26
XYZ leased plant for 6 years. Annual payments in arrears were £21,570. Interest rates were 5%. Current liabilities at the end of year 02 were A) £14,322 B) £17,746 C) £22,895 £23,497 ABC makes a 1:5 bonus issue. Pre-issue, ABC had 40,000 £1 shares with shareholder funds of £100,000. Post-issue, retained earnings were A) £72,000 £68,000 £52,000 £48,000 LMN revalued plant by £20,000 at the start of the year. The plant cost £30,000 and is halfway through its useful working life. LMN uses straight line depreciation at 10% p.a. with zero residual value. At the year-end LMN's revaluation reserve was A) £16,000 B) £15,000 C) £12,000 D) £10,000 Following a fully subscribed 1:4 rights issue to raise £10,000, PQR had 50,000 £1NV shares in issue. If the pre-rights share price was 160p, the post-rights price will be A) 162p B) 158p 148p 142p Gearing at DEF is 30%. Interest expense on its 10% loan stock amounted to £60,000 this year, and there are 450,000 £2NV shares in issue. Retained earnings…
The estimated pre-IPO value of equity in thecompany is about $63 million and there are 4million shares of existing shares of stock held byfamily members. The investment bank will chargea 7% spread, which is the difference between theprice the new investor pays and the proceeds tothe company. To net $18.3 million, what is thevalue of stock that must be sold? What is the totalpost-IPO value of equity? What percentage of thisequity will the new investors require? How manyshares will the new investors require? What is theestimated offer price per share?
Grouper Co. invested $1,060,000 in Monty Co. for 25% of its outstanding stock. Monty Co. pays out 30% of net income in dividends each year.Use the information in the following T-account for the investment in Monty to answer the following questions. Investment in Monty Co. 1,060,000 121,000 36,300 (a) How much was Grouper Co.’s share of Monty Co.’s net income for the year? Net income $enter Grouper’s net income in dollars (b) What was Monty Co.’s total net income for the year? Total net income $enter the total net income of MontyCo. for the year (c) What was Monty Co.’s total dividends for the year? Total Dividends $enter the total dividends of MontyCo. for the year (d) How much was Grouper Co.’s share of Monty Co.’s dividends for the year? Dividends $enter the dollar amount of dividends for Grouper Co.
A company just issued $225000 of perpetual 6% debt and used the proceeds to repurchase stock. The company expects to generate 109000 of EBIT in perpetuity. The company distributes all its earnings as dividends at the end of each year. The firm's unlevered cost of capital is 15% and the tax rate is 25%. Use FTE to calculate the value of the company's equity.

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