current assets is estimated at £45m. Recent profit after tax is £37m and a sector P/E ratio is 12

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Waldo Lt Balance sheet

 

£m

£m

Non Current Assets

 

180

Current Assets

75

 

 

 

 

Current Liabilities

(25)

50

 

 

230

Financed by:

 

 

Ordinary Shares (25p)

 

138

Reserves

 

32

8% Loan notes

 

60

 

 

230

 

 

 

 

The realisable value of the fixed assets is estimated at £135m and the realisable value of current assets is estimated at £45m. Recent profit after tax is £37m and a sector P/E ratio is 12.

Using the information above, calculate the firm value per share using the realisable value method for the shares in Waldo Ltd.

                         

Group of answer choices

£0.70 or 70p per share

£0.14 or 14p per share

£0.17 or 17p

£0.31 or 31p per share

Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Financial Policy and Growth
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education