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Agyawadwo Ltd wants to raise equity capital for a new project. Upon some financial consultation with ABC financial advisors, they have learnt that right issues, retained earnings and private placement are very popular and important methods for raising equity capital but there is disagreement among management as to which method should be used. Required a) Discuss how these three methods compare broadly in terms of the amount that can be raised, the cost of issue, dilution of control, degree of under-pricing, and market perception? [13 marks] b) Examine any three factors that could influence a business for the choice of equity finance or debt finance. [12 marks]
LT India Ltd has the following capital structure, which it considers optimal: Debt 35% Equity shares 65% Total 100% Applicable tax rate for the company is 25%. Risk free rate of return is 6%, average equity market investment has expected rate of return of 12%. The company’s beta is 1.10. Debt will bear an interest rate of 9% p.a
Calculate a. component cost of debt and equity shares assuming that the company does not issue any additional equity shares.
b. Weighted Average Cost of Capital (WACC)
Kindly answer this as soon as possible.
Do a detailed sector analysis of Nestle Pakistan. IN TERMS OF FINANCE
REMEMBER THIS:
Industry analysis, for an entrepreneur or a company, is a method that helps to understand a company's position relative to other participants in the industry.
An online shop delivers soap items within and outside Isabela. An initial shipping fee of P80.00 is collected for orders amounting to P500.00 or less, an extra charge of P40.00 for items with total value between P500.00 and P1000.00 and a double initial shipping for orders costing to P1000.00 and up. How much is the shipping fee if the total amount of orders is P1,350.00?
Explain the consumption function for a closed economy with a government sector (10)
2.2 Assuming a fall in the price of oil, use the AD-AS framework to explain the impact on prices, employment and income.
Determine the new share price, EPS and price earnings ratio under both alternatives ( ie. Pay the dividend or repurchase the shares)
when the price of a good increased by 10%, the quantity of demanded increased 2%. are there substitutes for this commodity? if yes, describe the nature of the substitute. is the good more likely to be a necessity? why? is the good likely to be broadly or narrowly defined? why?
1. Assume you are a manager of XY Company, while you conduct a vertical analysis it is identified that 85% of the company expenses are incurred for salary. This intern highly affected the profitability of the organization. As a manager what are the possible remedial actions that you suppose to take in order to mitigate this drawbacks?
1. 1 July 2013 N. Nicols deposited R60 000 into the bank account of the business as capital.
2. 3 July 2013: She bought a second- hand removal van on credit from M Davids for R 100 000
3. 3 July 2013: Filled the removal van with petrol and paid cash, R700.
4. 4 July 2013: Placed an advertisement in the Peace News for R350 on credit.
5. 4 July 2013: Paid his personal telephone account of R470 for June 2013 with a business cheque.
6. 7 July 2013: Obtained a loan from Learners Bank for R20 000.
7. 10 July 2013: Transported furniture for D Dennis on credit R2 000.
8. 14 July 2013: She transferred personal equipment to the value of R10 000 to the business.
9. 17 July 2013: Paid R20 000 to M Davids as payment on the removal Van.
10. 18 July 2013: Bought a computer for R5 000 from Movement Ltd and paid by cheque.
11. 22 July 2013: Received R800 from B Bonolo for the transport of equipment
REQUIRED:
Prepare the General Ledger of N. Nicols for the year ended July 2013
