a) The following Capital structure is extracted from Mirza Corporation Sdn Bhd a multinational company producing electronic gadgets. The capital structure on Jun 2022 is as followed. The number of common stock outstanding was 40,000 units and value is RM$8,000,000. The preference share valued at RM$2,000,000 and expected dividend payout is 11%. The preferred stock par value is RM$1.00 and current internal trading price is RM1.08. We have taken debenture as loan which amount to RM$6,000,000 and pay 12% as interest rate. The par value of debenture is RM$100 and Market price is RM$90. The share of the company currently is traded for RM$25. The company is expected to pay a divided of RM$2 per common share which will grow at 7% forever. The tax bracket for the company is 40%. I. II. III. Compute the Capital structure and the proportion Compute the cost of the capital for Mirza's Capital structure. Compute the weighted average cost of capital for the existing capital structure.

a) The following Capital structure is extracted from Mirza Corporation Sdn Bhd a multinational company producing electronic gadgets. The capital structure on Jun 2022 is as followed. The number of common stock outstanding was 40,000 units and value is RM$8,000,000. The preference share valued at RM$2,000,000 and expected dividend payout is 11%. The preferred stock par value is RM$1.00 and current internal trading price is RM1.08. We have taken debenture as loan which amount to RM$6,000,000 and pay 12% as interest rate. The par value of debenture is RM$100 and Market price is RM$90. The share of the company currently is traded for RM$25. The company is expected to pay a divided of RM$2 per common share which will grow at 7% forever. The tax bracket for the company is 40%. I. II. III. Compute the Capital structure and the proportion Compute the cost of the capital for Mirza's Capital structure. Compute the weighted average cost of capital for the existing capital structure.

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

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1. You are required to calculate the Weighted Average Cost of Capital (WACC) of Sethoo & Sons Limited from the data below: Black Limited Star Limited Number of Ordinary Shares (GH¢1.00) 2,000,000 1,000,000 Net Income available to Ordinary Shares 600,000 250,000 Gross Dividend 500,000 200,000 Market Price per share 3.00 2.00 Market value of Debts 3,000,000 1,500,000 Annual Growth rate of Dividend 12% 10% Gross Interest yield 10% 11% NOTE: The corporation tax rate is 50%. Debts are currently quoted at GH¢100 per block. 2. Explain why the Market Value Approach of calculating WACC is preferred to the Book Value Approach. 3. What are the uses of Weighted Average Cost of Capital?
4.) During 2021, CAPTAIN AMERICA Company had two classes of shares issued and outstanding for the entire year. Additional information are as follows: Ordinary share capital, par ₱10 - ₱1,000,000; 7% Preference share capital, ₱100 par, cumulative - ₱500,000. The net income for the year amounts to ₱500,000. What is the basic earnings per share?
Company E has 4 million shares of stock outstanding, 1 million shares of preferred stock, and 20,000 bonds. If the common shares sell for $28 per share, the preferred shares sell for $18.50 per share, and the bonds are selling for 97% of par, what would be the weights used in the calculation of Company E’s Weighted Average Cost of Capital (WACC)?
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.
The entity received P4,500,000 cash from the issuance of its 9%, 10-year P5,000,000 par value preference shares. How much is the cost of the preference shares using the following methods? 1. Yield-to-maturity formula 2. Interpolation method using multiplies of 1%
For example, GoTo completes its IPO on April 12, 2022 and is listed on the IDX. GOTO released 40,615,056,000 shares at a selling price of Rp. 338/unit with an underwriting discount of 5%. Investors in the secondary market pay only Rp. 300 per share of GoTo's outstanding shares of 50,000,000,000. Calculate: a. Total proceeds and net proceeds for IPO GoTo b. How much does the underwriting fee cost? c. What is the market capitalization for the outstanding GoTo shares? d. Calculate IPO underpricing and explain IPO underpricing for GoTo
Huntington Power Co. has issued following three securities as its long-term source of capital. Calculate the weights of each source of capital (kd, kp, ke). Debt: 2,500 bonds outstanding, current market price of the bond is $1,080. Preferred Stock: 3,000 shares outstanding, selling for $98. Common Stock: 60,000 shares outstanding, selling for $55 per share. a. 42.90%; 4.67%; 52.43% b. 45.63%; 1.72%; 59.67% c. 42.90%; 4.67%; 55.71% d. 59.67%; 5.08%; 35.24% e. 45.63%; 1.72%; 52.65% f. 42.90%; 2.23%; 52.14%
The market capitalization of Morning Rose Corp. is $5,580,000 at the company's most recent trade of $9.00 per share. How many shares of stock are outstanding?
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
Company ABC has a market capitalization of $750 million, Book Value (Shareholder’s Equity) Per share of $15 and net income of $25 million. If the stock is currently trading at $30. The Return on Equity is: 3.3% 6.7% 9.3% 50.0%

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