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Which of the following figures need to be used when calculating the value of the combined entity in $ millions?
Listed company R is in the process of making a cash offer for the equity of unlisted company S. Company R has a market capitalisation of $200 million and a price/earnings ratio of 10. Company S has a market capitalisation of $50 million and earnings of $7 million. Company R...
Which THREE of the following are advantages of the company undertaking a share repurchase programme?
A company has accumulated a significant amount of excess cash which is not required for investment for the foreseeable future. It is currently on deposit, earning negligible returns. The Board of Directors is considering returning this excess cash to shareholders using a share repurchase programme. The majority of shareholders are...
Which THREE of the following non-financial objectives would be most appropriate for a listed company in the food retailing industry?
Which THREE of the following non-financial objectives would be most appropriate for a listed company in the food retailing industry?A . Reduce customer complaintsB . Increase customer service qualityC . Reduce production timeD . Improve staff moraleE . Reduce raw material wastageView AnswerAnswer: A,B,D
Ignoring any premium paid on acquisition, which acquisition should the directors pursue?
Company Z has identified four potential acquisition targets: companies A, B, C and D. Company Z has a current equity market value of $580 million. The price it would have to pay for the equity of each company is as follows: Only one of the target companies can be acquired...
Which TWO of the following statements are true?
Company A is proposing a rights issue to finance a new investment. Its current debt to equity ratio is 10%. Which TWO of the following statements are true? A. The issue price has to be at least 20% below the pre-rights share price. B. The issue price of new shares...
A company needs to raise $20 million to finance a project.
A company needs to raise $20 million to finance a project. It has decided on a rights issue at a discount of 20% to its current market share price. There are currently 20 million shares in issue with a nominal value of $1 and a market price of $5 per...
Which of the following statements is most likely to be a reason for choosing the scrip dividend?
A company is deciding whether to offer a scrip dividend or a cash dividend to its shareholders. Although the company has excellent long-term growth prospects, it is experiencing short-term profit and cash flow problems. Which of the following statements is most likely to be a reason for choosing the scrip...
What would you expect the share price after the repurchase to be?
CORRECT TEXT A company is planning to repurchase some of its shares. Relevant details are as follows: • 100 million shares in issue • Current share price $5 • 5 million shares to be repurchased • 10% repurchase premium • Repurchased shares to be cancelled What would you expect the...
A company has forecast the following results for the next financial year:
A company has forecast the following results for the next financial year: The following is also relevant: • Profit after tax for the year can be assumed to be equivalent to free cash flow for the year. • Debt finance comprises a $10 million floating rate loan which currently carries...
Which THREE of the following non-financial objectives would be most appropriate for a listed company in the food retailing industry?
Which THREE of the following non-financial objectives would be most appropriate for a listed company in the food retailing industry?A . Reduce customer complaintsB . Increase customer service qualityC . Reduce production timeD . Improve staff moraleE . Reduce raw material wastageView AnswerAnswer: A,B,D
