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Where did it get the 280,000 ordinary equity shares thanks.

Where did it get the 280,000 ordinary equity shares thanks.

Essentials Of Investments
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
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Where did it get the 280,000 ordinary equity shares thanks.
Assessing Long-term Debt, Equity and Capital Structure 625 Illustrative Case 24-2. Financing Expansion Program Lamina Equipments Company's current capital structure consists of 8% debt with a market value and book value of P4,000,000 and 200,000 shares of outstanding common stock with a market value of P15,000,000. The firm is considering a P6,000,000 expansion program using one of the following financing plans. 4MXSK EXTENSION PROGAM Plan I: Sell additional debt at 10% interest Plan II: Sell preferred shares with a 10.5% dividend yield Plan III: Sell new ordinary equity securities at P150 per share BOOK VALUE 5% CAMINA CURRENT CAPITAL CONSISTS OF L- 8% DEST The corporate tax rate is 34%. Ignore flotation costs. (a) If the expected level of EBIT after the expansion is P2,500,000, the EPS for each financing plan is calculated as follows: EBIT SELL APPE DEBT AT 10% INTEREST 6MX Less: Interest on existing debt Interest on new debt Total Earnings before taxes Less: Income taxes (Earnings before fox Net income CORPORATE TAY RATEX 345 Dividends - Preferred shares GMX 10: Earnings available to common shareholders Ordinary Equity Shares Earnings per share Plan II = EXPASTION P320,000+ Plan III= P320,000 PROGRAM Plan I Debt P2,500,000 320,000 320,000 600,000 No ADR4 DGBT = 0 920,000 320,000 SPONDYSELD GIVEN SHIPS P1,042,800 <-200,000 P5.2) ↑ 2 DECIMAL PLACES The financial break-even point is the level of EBIT at the firm's EPS equals zero. Plan I = P920,000 P1,580,000 EPT P2,180,000 ERT 37741,200 P1,438,800 630,000 537,200 P1,042,800 Plan II Preferred Shares P2,500,000 630,000 (1-.34) P 808,800 200,000 P4.04 Plan III Ordinary Equity Shares P2,500,000 320,000 NO ADD+ DECT-0 P1,274,545 P2,180,000 320,000 7741,200 P1,438,800 0 PL.438.800 280.000 PS.14
Transcribed Image Text:Assessing Long-term Debt, Equity and Capital Structure 625 Illustrative Case 24-2. Financing Expansion Program Lamina Equipments Company's current capital structure consists of 8% debt with a market value and book value of P4,000,000 and 200,000 shares of outstanding common stock with a market value of P15,000,000. The firm is considering a P6,000,000 expansion program using one of the following financing plans. 4MXSK EXTENSION PROGAM Plan I: Sell additional debt at 10% interest Plan II: Sell preferred shares with a 10.5% dividend yield Plan III: Sell new ordinary equity securities at P150 per share BOOK VALUE 5% CAMINA CURRENT CAPITAL CONSISTS OF L- 8% DEST The corporate tax rate is 34%. Ignore flotation costs. (a) If the expected level of EBIT after the expansion is P2,500,000, the EPS for each financing plan is calculated as follows: EBIT SELL APPE DEBT AT 10% INTEREST 6MX Less: Interest on existing debt Interest on new debt Total Earnings before taxes Less: Income taxes (Earnings before fox Net income CORPORATE TAY RATEX 345 Dividends - Preferred shares GMX 10: Earnings available to common shareholders Ordinary Equity Shares Earnings per share Plan II = EXPASTION P320,000+ Plan III= P320,000 PROGRAM Plan I Debt P2,500,000 320,000 320,000 600,000 No ADR4 DGBT = 0 920,000 320,000 SPONDYSELD GIVEN SHIPS P1,042,800 <-200,000 P5.2) ↑ 2 DECIMAL PLACES The financial break-even point is the level of EBIT at the firm's EPS equals zero. Plan I = P920,000 P1,580,000 EPT P2,180,000 ERT 37741,200 P1,438,800 630,000 537,200 P1,042,800 Plan II Preferred Shares P2,500,000 630,000 (1-.34) P 808,800 200,000 P4.04 Plan III Ordinary Equity Shares P2,500,000 320,000 NO ADD+ DECT-0 P1,274,545 P2,180,000 320,000 7741,200 P1,438,800 0 PL.438.800 280.000 PS.14
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