The business plan calls for an investment of R15 000 and promises to return R10 000. per year from the end of the fifth year. Touchstone requires a return of 50% and the entrepreneurs awarded themselves 2 000 shares. The PE ratio of VMC at

the end of the fifth year is expected to be 15. If Touchstone is to take equity, determine :

The value of VMC now (year 0)

b) The shares which Touchstone needs buy to reflect its holding

c) The price of shares after issue is made at time 0

Answer rating: 100% (QA)

a The value of VMC now year 0 R15 000 1 055 R4 352 The value of VMC at the ... View the full answer