Consider the following information regarding Seek Ltd (ASX:SEK) in Australia Year 0Year 1Year 2 EPS $1.45$1.67DPS $0.61$0.68 Book Value of Share$19.00 Required Equity Return5% Share Price on ASX$21 Required:a) Assuming Seek will close operations in 2 years’ time, value an ordinary share in this companyusing the Residual Income Method.b) Is Seek fairly valued on the ASX? Please explain fully your response.

Consider the following information regarding Seek Ltd (ASX:SEK) in Australia Year 0 Year 1 Year 2 EPS $1.45 $1.67 DPS $0.61 $0.68 Book Value of Share $19.00 Required Equity Return 5% Share Price on ASX $21

Consider the following information regarding Seek Ltd (ASX:SEK) in Australia Year 0 Year 1 Year 2 EPS $1.45 $1.67 DPS $0.61 $0.68 Book Value of Share $19.00 Required Equity Return 5% Share Price on ASX $21

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Consider the following information about Firm A and Firm T: Item Firm A (Acquiring firm) Firm T (Target firm) Price per share $20 $15 Outstanding shares 50 25 Total market value $1000.00 $375 Total cost of the acquisition is $500.00 and the merger is estimated to create a synergistic gain of $700.00. What is the NPV of the acquisition to firm A? Select one: a. $1075.00 b. $575.00 c. $425.00 d. $555.00
Question1 a) On 31 December 2018 Pee Plc purchased 80% of the share capital of Cee Ltd for £60,000 when its accumulated profits were £30,000. The individual Statement of Financial Positions of PeePlc and CeeLtdat 31December2020were as follows: Рее Cee Cee Ltd £ £ Non-current assets: Property, plant and equipment 160,000 50,000 Cost of investment 60,000 00000 220,000 50,000 Current assets 30.000 10,000 Total assets 250,000 60,000 Equity and liabilities Ordinarysharesof£leach 100,000 20,000 Retained profits 150,000 40,000 250,000 60,000 Consolidated goodwill is subject to an annual impairment review. No impairment has been detected to date. Required: Prepared the consolidated statement of financial position for the Pee group at 31 December 2020. Pee plc has a policy of valuing Non-Controlling interest at their share of net assets at acquisition.
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?
Required: (a)Assuming a rights issue of shares is made, calculate: (i)the theoretical ex-rights price of an ordinary share in Devonian plc (ii)the value of the rights for each original ordinary share. (b)Calculate the price of an ordinary share in Devonian plc in one year’s time assuming: (i)a rights issue is made (ii)a loan issue is made. Comment on your findings.
Produce a consolidated balance sheet for Johnston Group as at 30 September 20X6 consistent with international accounting standards.
am. 50.