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Beach Limited is into the provision of online conference call facilities which has become popular due to Covid-19. The company has 10 million issued shares currently at Tk. 50 each, 3 million preference shares trading at Tk. 25 each and 5,000 bonds also trading at Tk. 600 each. Required: (1) Calculate the capital structure of the company. (ii) How much should the company earn annually to achieve a return of 25% per annum on capital employed for equity holders if dividend rate on preference shares per annum is 20% and coupon on the bonds is 18%? Interest paid on debt is tax deductible and corporate tax rate is 25%. Beach Limited is into the provision of online conference call facilities which has become popular due to Covid-19. The company has 10 million issued shares currently at Tk. 50 each, 3 million preference shares trading at Tk. 25 each and 5,000 bonds also trading at Tk. 600 each. Required: (1) Calculate the capital structure of the company. (ii) How much should the company earn annually to achieve a return of 25% per annum on capital employed for equity holders if dividend rate on preference shares per annum is 20% and coupon on the bonds is 18%? Interest paid on debt is tax deductible and corporate tax rate is 25%.
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Answer rating: 100% (QA)
Solution 1 Calculate the capital structure of the company Equity Equity 10 000 000 shares x Tk50shar... View the full answer
Related Book For
Modern Advanced Accounting In Canada
ISBN: 9781259066481
7th Edition
Authors: Hilton Murray, Herauf Darrell
Posted Date:
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