Question: 1.3 Pops Ltd is a software developing company with significant intangible assets. The directors want to calculate the CIV (Calculated Intangible Value) of the company.

1.3 Pops Ltd is a software developing company with significant intangible assets. The directors want to calculate the CIV (Calculated Intangible Value) of the company. Pops Ltd reported a profit before interest and tax of R47 million in the most recent accounting period. The company has a WACC of 12%. Its debt finance comprises a long term bond with a coupon rate of 9% and a nominal value of R17 million. The industry average pretax return on assets for the software development industry is 14%, and the corporate tax rate is 27%. Its tangible assets are worth R31 million. What is the CIV of Pops Ltd (to the nearest R0.1 million)?

A R 259.5 million

B R 250.2 million

C R 231.0 million

D R 239.6 million

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