a)The following balance sheet relates to XYZ Ltd for the period ended 31ST December 2018 Sh. 000
Question:
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 the corporate Tax rate is 30% p.a.
Compute the company’s WACC
b)Highlight 4 reasons in support of cross-border listing
c)Explain 3 managerial functions of a finance manager
d) Describe 3 types of partners in a partnership
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
Expert Answer:
