$11.$ Case $(10\mathrm{.}2)$ Hatleigh Ltd$.$

Require:

a$)$ Calculate:

I. the total number of shares and

II$.$ the total par value of debentures that will have to be issued in order to raise the funds

necessary to reduce the overdraft to the level required by the bank.

b$)$ Calculate the expected earnings per share for the year to April $30,2010,$ assuming:

I. the issue of shares, and

II$.$ the issue of debentures are carried out to reduce the overdraft to the level required by

the bank.

c$)$ Critically evaluate the proposal of the chairman to raise the necessary funds by the issue of:

I. Shares

II$.$ Debentures.

III. An issue of debentures is made