a)The following balance sheet relates to XYZ ltd for the period ended 31ST December 2018 Sh. ‘000’ Sh
Posted: Wed Apr 06, 2022 9:10 am
a)The following balance sheet relates to XYZ ltd for the period
ended 31ST December 2018
Sh.
‘000’
Sh. ‘000’
Non-Current Assets
32,500
Current Assets
42,875
75,375
Financed by:
Liability and owner’s Equity
12,500
18% Debentures (Shs. 1000 par) 16,000
10% Preference Shares
6,250
Ordinary Shares (Sh. 10 par)
12,500
Retained Earnings
28,125
75,375
Additional Information;
The debentures are now selling at Sh. 950 in the market and they
will be redeemed 10 years from now
By the end of the last financial period, the company had
declared unpaid sh. 5 per share dividends. Dividends are expected
to grow at an annual rate of 10% in the foreseeable future.
Currently, the company’s shares sell at sh. 38 per share in the
stock exchange
Preference shares were issued in 2015 and their prices have
remained the same over the years and corporate Tax rate is 30%
p.a.
Compute the company’s WACC (10 Marks)
b)Highlight 4 reasons in support of cross boarder listing (4
Marks)
c)Explain 3 managerial functions of a finance manager (6
Marks)
d) Describe 3 types of partners in a partnership (6 Marks)
e)Agency costs refer to costs incurred by shareholders in trying
to control management behavior and actions and therefore minimize
agency conflicts. Outline 4 of those costs (4 Marks)
ended 31ST December 2018
Sh.
‘000’
Sh. ‘000’
Non-Current Assets
32,500
Current Assets
42,875
75,375
Financed by:
Liability and owner’s Equity
12,500
18% Debentures (Shs. 1000 par) 16,000
10% Preference Shares
6,250
Ordinary Shares (Sh. 10 par)
12,500
Retained Earnings
28,125
75,375
Additional Information;
The debentures are now selling at Sh. 950 in the market and they
will be redeemed 10 years from now
By the end of the last financial period, the company had
declared unpaid sh. 5 per share dividends. Dividends are expected
to grow at an annual rate of 10% in the foreseeable future.
Currently, the company’s shares sell at sh. 38 per share in the
stock exchange
Preference shares were issued in 2015 and their prices have
remained the same over the years and corporate Tax rate is 30%
p.a.
Compute the company’s WACC (10 Marks)
b)Highlight 4 reasons in support of cross boarder listing (4
Marks)
c)Explain 3 managerial functions of a finance manager (6
Marks)
d) Describe 3 types of partners in a partnership (6 Marks)
e)Agency costs refer to costs incurred by shareholders in trying
to control management behavior and actions and therefore minimize
agency conflicts. Outline 4 of those costs (4 Marks)