South Hampton University is preparing its budget for the upcoming academic year. This is a specialised private university that charges fees for all degree courses. Currently, 30,000 students are enrolled on campus. However, the university is forecasting a 5 per cent growth in student numbers in the coming year, despite an increase in fees to $3,000 per subject. The following additional information has been gathered from an examination of university records and conversations with university managers: South Hampton is planning to award scholarships to 200 students, which will cover their fees. The average class has 80 students, and the typical student takes 4 subjects per semester. South Hampton operates 2 semesters per year. The average academic staff salary is $120,000 per annum including on-costs. South Hampton’s academic staff are evaluated on the basis of teaching, research, administration and professional/community service. Each of the academic staff teaches the equivalent of three subjects during the academic year. Required: a) Prepare a revenue budget for the upcoming academic year. b) Determine the number of staff needed to cover classes. c) Assume there is a shortage of full-time academic staff. List at least five actions that South Hampton might take to accommodate the growing student numbers.
Cost of Debt, Cost of Preferred Stock
This article deals with the estimation of the value of capital and its components. we'll find out how to estimate the value of debt, the value of preferred shares , and therefore the cost of common shares . we will also determine the way to compute the load of every cost of the capital component then they're going to estimate the general cost of capital. The cost of capital refers to the return rate that an organization gives to its investors. If an organization doesn’t provide enough return, economic process will decrease the costs of their stock and bonds to revive the balance. A firm’s long-run and short-run financial decisions are linked to every other by the assistance of the firm’s cost of capital.
Cost of Common Stock
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South Hampton University is preparing its budget for the upcoming academic year. This is a specialised private university that charges fees for all degree courses. Currently, 30,000 students are enrolled on campus. However, the university is
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South Hampton is planning to award scholarships to 200 students, which will cover their fees.
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The average class has 80 students, and the typical student takes 4 subjects per semester. South
Hampton operates 2 semesters per year.
-
The average academic staff salary is $120,000 per annum including on-costs.
-
South Hampton’s academic staff are evaluated on the basis of teaching, research, administration and professional/community service. Each of the academic staff teaches the equivalent of three subjects during the academic year.
Required:
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a) Prepare a revenue budget for the upcoming academic year.
-
b) Determine the number of staff needed to cover classes.
-
c) Assume there is a shortage of full-time academic staff. List at least five actions that South Hampton might take to accommodate the growing student numbers.(explain)
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